Oil exports: U.S. and Canada hit record highs

The United States and Canada each set a record for oil exports in 2022, with more than $100 billion each.

While U.S. external oil sales were $117.034 billion, up 68.9 percent year-on-year, Canada’s corresponding sales totaled $120.584 billion, an advance of 47.1 percent.

Until 2016, U.S. oil exports had not exceeded $10 billion.

At the beginning of 2021, according to shipping company Euronav, proven world oil reserves totaled 1.732 trillion barrels, about 53 times the current annual production rate (based on 2021 crude oil production).

These reserves are often located in regions far from major consuming countries, separated by large bodies of water, and this geographic barrier creates demand for shipping crude oil in tankers.

However, the development of shale oil reserves in the United States had a negative impact on the volume of U.S. crude oil imports as well as tanker demand between 2004 and 2014.

Still, the increase in U.S. crude exports on long-haul routes to China and India is good news for shipowners, as each additional barrel exported from the country will open avenues for equal imports, as the U.S. is a net importer of crude oil.

Oil exports

New technologies, such as horizontal drilling and hydraulic fracturing, sparked a shale oil revolution in the United States, and in 2013, for the first time in the previous two decades, the United States produced more oil than it imported.

In light of the growing surplus in oil production, the U.S. Congress in 2015 lifted a 40-year ban on crude oil exports that was put in place following the Arab oil embargo in 1973.

This allowed U.S. oil producers access to international markets.

The first shipments of U.S. crude went to Europe immediately after the ban was lifted, and other destinations have since followed.

The U.S. exported 0.5 mbpd of crude in 2015 and 2016.

However, 2017 marked a major event for U.S. crude producers, as the country exported crude to all major importers, including China, India, South Korea and several European countries.

War

According to Euronav, U.S. crude oil exports increased slightly to 3.2 mbpd in 2020 as the Covid-19 outbreak and the sharp drop in crude oil prices in 2020 negatively affected oil production, thus reducing export momentum.

Then U.S. crude oil exports continued to decline in 2021 due to lower crude oil production.

Finally, in terms of volume, U.S. crude oil exports increased by about 21% in 2022 due to higher U.S. crude oil demand following sanctions on Russian crude oil exports and the massive release of U.S. oil from emergency stockpiles.