Key facts
- U.S. oil exports averaged 3.66 million barrels per day in July, an eight-month low.
- A brief U.S.-Iran understanding in June increased Middle Eastern oil supply, reducing demand for U.S. crude.
- Domestic refinery utilization reached its highest rate since 2018, diverting barrels from export.
- Exports to Asia and Europe decreased in July compared to previous months.
- Analysts predict U.S. oil exports will rise in August and September, exceeding 4 million barrels per day.
U.S. oil exports in July decreased to 3.66 million barrels per day, marking an eight-month low, according to ship tracking data. This decline occurred as a brief U.S.-Iran understanding in June temporarily increased Middle Eastern oil supply, reducing global demand for American crude.
Previously, the U.S. had become the world's top oil exporter this year, with shipments surging to a record 5.7 million barrels per day in May. However, exports have steadily declined since then. The memorandum of understanding between Washington and Tehran allowed more tankers to navigate the Strait of Hormuz, adding supply to the market.
The share of U.S. oil exports to Asia shrank to approximately 40% in July from 52% in June. Shipments to Japan, the top buyer, fell 67% from their May peak, while exports to South Korea decreased by 39%. Shipments to Europe also reduced to about 1.7 million barrels per day in July from 2.5 million barrels per day in May.
Exports of crude oil from the U.S. Strategic Petroleum Reserve also slowed significantly. High refinery utilization in the U.S., reaching its highest rate since 2018, kept more barrels domestically. Crude oil input to U.S. refineries was at its highest level in about seven years.
Analysts anticipate that U.S. oil exports will rebound in August and September, with volumes expected to exceed 4 million barrels per day. This projected increase is supported by a widening discount of U.S. West Texas Intermediate (WTI) crude to global benchmark Brent, which encourages exports. Ship fixtures from the U.S. Gulf Coast have been busy, with a notable number of Very Large Crude Carriers booked for Asia and Europe.