First-half 2020 U.S. crude oil exports increase year-over-year despite declines beginning in March

U.S. net imports of crude oil (imports of crude oil minus exports of crude oil) declined in the first half of 2020 compared with the first half of 2019. However, monthly net imports increased in May and June 2020 as U.S. exports declined and imports increased. U.S. crude oil exports in the first half of 2020 were higher than in the first half of 2019 despite declining since the record high in February 2020 (Figure 1). Monthly crude oil imports declined sharply in April before increasing in May and June, but U.S. crude oil imports in the first half of 2020 were much lower than levels seen during the same period in 2019. The decline in trade volume (falling exports since March and declining in imports in April) came as responses to the spread of the 2019 novel coronavirus disease (COVID-19) reduced petroleum demand.

Global petroleum demand began to decline rapidly in February 2020, falling an estimated 4.5 million barrels per day (b/d) from February 2019, the largest year-over-year decrease in U.S. Energy Information Administration (EIA) data up to that point. Estimates of year-over-year declines reached a record 20.2 million b/d in April 2020. EIA estimates that global petroleum demand fell from 100.7 million b/d in the first half of 2019 to 90.0 million b/d in the first half of 2020. In the United States, gross inputs into refiners fell from 16.8 million b/d in the first half of 2019 to 15.0 million b/d in the first half of 2020, reflecting lower demand because of COVID-19 and its mitigation efforts. The declining demand for crude oil and petroleum products has driven U.S. exports and imports lower.

After reaching a record high of 3.7 million b/d in February 2020, U.S. crude oil exports fell by 151,000 b/d in March 2020 to 3.6 million b/d and then by a record 480,000 b/d to 3.1 million b/d in April 2020. Exports continued to decline, falling to 2.9 million b/d in May (30,000 b/d lower than the May 2019 level) and to 2.8 million b/d in June (347,000 b/d lower than the June 2019 level). Despite the recent declines, U.S. crude oil exports averaged 3.2 million b/d in the first half of 2020, up from 2.9 million b/d in the first half of 2019.

A large increase in exports to China drove the year-over-year increase in U.S. crude oil exports in the first half of 2020. During this period, U.S. crude oil exports to China increased by 213,000 b/d (143%) from the first half of 2019 to an average of 361,000 b/d in the first half of 2020. A spike in May drove the increase in exports to China when exports reached 1.3 million b/d, up from 114,000 b/d in April 2020 and 250,000 b/d in May 2019. Trade press reports indicate that Chinese government imported oil for its stockpiles during this period because of low crude oil prices. Reports also indicate that U.S. exports to China may increase in August and September because China has booked tankers to carry oil from the United States to China during this period in an apparent effort to meet its Phase 1 purchase commitments under the U.S.-China trade agreement.

In the first half of 2020, China was the second-largest destination for U.S. crude oil exports after Canada. U.S. exports to Canada averaged 389,000 b/d of crude oil, down 89,000 b/d (19%) from 2019 levels during the same period. The Netherlands, South Korea, and the United Kingdom were the next largest destinations for U.S. crude oil exports in the first half of 2020 (Figure 2). Compared with the first half of 2019, exports to the Netherlands and the United Kingdom increased by 29,000 b/d (11%) and 40,000 b/d (18%), respectively, while exports to South Korea fell by 105,000 b/d (27%).

U.S. imports of crude oil averaged 6.2 million b/d in the first half of 2020, down 855,000 b/d (12%) compared with the first half of 2019. Monthly imports declined significantly in April before increasing in May and June. The large monthly increase in U.S. crude oil imports in May was driven by imports from Saudi Arabia, which rose by 737,000 b/d to 1.2 million b/d. In June, imports from Saudi Arabia increased again, but at a much lower rate (55,000 b/d). This spike in U.S. imports from Saudi Arabia followed a surge in Saudi Arabia’s crude oil production in April, which occurred as an earlier Organization of the Petroleum Exporting Countries and partner countries (OPEC+) agreement to cut production expired and before a new agreement was in place. Crude oil production in Saudi Arabia rose to a high of 11.6 million b/d in April (the highest level in EIA’s data going back to 1993). Because it takes crude oil tankers several weeks to transit from the Persian Gulf to the United States, these imports from Saudi Arabia did not show up until May and June. The most recent OPEC+ production cuts were implemented starting in May. As Saudi production declined, U.S. imports from Saudi Arabia fell (Figure 3). Preliminary weekly data indicate that U.S. imports from Saudi Arabia fell in July and August to 513,000 b/d and 311,000 b/d, respectively.

U.S. average regular gasoline and diesel prices decrease

The U.S. average regular gasoline retail price decreased by nearly 3 cents from the previous week to $2.18 per gallon on September 14, 37 cents lower than the same time last year. The Midwest price decreased by nearly 4 cents to $2.03 per gallon, the Gulf Coast price decreased by more than 3 cents to $1.86 per gallon, the East Coast price decreased by 3 cents to $2.14 per gallon, the Rocky Mountain price decreased by nearly 2 cents to $2.33 per gallon, and the West Coast price decreased by less than 1 cent, remaining virtually unchanged at $2.86 per gallon.

The U.S. average diesel fuel price decreased by more than 1 cent from the previous week, to $2.42 per gallon on September 14, 57 cents lower than a year ago. The East Coast, Midwest, and Gulf Coast prices each decreased by more than 1 cent to $2.50 per gallon, $2.31 per gallon, and $2.17 per gallon, respectively, the Rocky Mountain price decreased by 1 cent to $2.37 per gallon, and the West Coast price decreased by less nearly 1 cent, remaining virtually unchanged at $2.96 per gallon.

Propane/propylene inventories decline

U.S. propane/propylene stocks decreased by 1.2 million barrels last week to 96.1 million barrels as of September 11, 2020, 8.2 million barrels (9.3%) greater than the five-year (2015-19) average inventory levels for this same time of year. Gulf Coast inventories decreased 2.0 million barrels, and East Coast inventories decreased 0.1 million barrels. Midwest inventories increased 0.9 million barrels, and Rocky Mountain/West Coast inventories increased slightly, remaining virtually unchanged.

For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.