US crude exports hit record high in May as Iran war tightens global oil supplies
By Arathy Somasekhar and Georgina McCartney HOUSTON, June 1 (Reuters) - U.S. crude exports climbed to a record 5.6 million barrels per day in May as the Middle East crisis pushed up demand for the country's oil from Asian and European refiners, ship tracking estimates showed on
HOUSTON, June 1 (Reuters) - U.S. crude exports climbed to a record 5.6 million barrels per day in May as the Middle East crisis pushed up demand for the country's oil from Asian and European refiners, ship tracking estimates showed on Monday.
The U.S. and Israel's war with Iran triggered the largest-ever disruption to the global energy market with refiners globally scrambling for alternatives to Middle Eastern supply. Around a fifth of the world's oil and gas supplies passes through the Strait of Hormuz. a key waterway that effectively closed when the war started at the end of February.
U.S. crude exports last month surged past the previous record set in April of 5.2 million bpd, according to data and analytics firm Kpler, as benchmark U.S. West Texas Intermediate prices traded at a steep discount to Brent, the global benchmark. Physical U.S. crude grades are typically priced as a differential to WTI, and a large discount to Brent makes it more economic for foreign buyers to purchase U.S. oil and ship it across the world.
WTI traded at a discount of as much as $20.69 a barrel to Brent futures in March, its widest in 13 years as supply disruptions in the Middle East led increases in Brent to outpace those in WTI. In April, when a bulk of the deals to export crude in May were executed, the spread averaged a discount of around minus $8.86, compared with an average of minus $4.85 before the war.
Exports to Europe and Asia touched record highs in May, with Asia taking 2.45 million bpd of the barrels exported, retaining its spot as the top buyer for a second month in a row. Europe was a close second at 2.4 million bpd.
Demand from Japan, which typically imports the bulk of its crude from the Middle East, accounted for the lion's share of Asian imports of U.S. grades in May, at 808,000 bpd, a 32% jump on the month and setting a record.
"It's not a surprise to see Asia pulling so much given the loss of barrels from the Mideast Gulf," said Kpler's Director of Commodity Research Matt Smith.
U.S. crude bound for the Mediterranean and Black Sea also hit a record high in May, with Bulgaria, Croatia, Turkey and Greece emerging as rare transatlantic buyers.
