US crude oil export flows that managed to stay afloat for much of 2020 are expected to sink in 2021 as decreased US output and recovering domestic refinery runs will mean fewer barrels to export.
Production is expected to average only 10.44 million b/d in 2021 but will gradually recover to pre-COVID levels around 12.8 million b/d by late 2023, according to Platts Analytics.
With fewer barrels available for export, total US crude exports are expected to decline to an average of 2.2 million b/d during 2021, down 1.0 million b/d from 2020 and far below the pre-COVID forecast of around 4 million b/d.
While the COVID-19 vaccine rollout has provided some hope that a “return to normal” is around the corner, full recovery of oil demand is likely to be a slow, bumpy ride. And the export market is no exception.
During the five years since the US federal crude export ban was lifted in December 2015, export flows from the US Gulf Coast quickly accelerated from zero to becoming an integral component of international supply.
US crude exports hit an all-time high of 4.15 million b/d for the week ended February 28, 2020 and volumes were expected to average around that 4 million b/d mark most of the year as US production continued to climb.
However, the coronavirus pandemic wreaked havoc on the oil market and demand for crude plummeted as the global economy suffered its deepest contraction since the Great Depression.
US crude exports managed to keep pace with 2019 levels and averaged 3.1 million b/d in 2020, according to EIA and US Census data. However, the ripple effects of 2020 and crude oil production declines in the US will have an impact on export flows for months to come.
US oil production shut-ins and a decline in drilling activity has led to about a 1 million b/d year-on-year decline in overall production for 2020, averaging 11.23 million b/d.
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