Monthly US crude oil exports are on track to reach a new all-time high of 5.48 million barrels per day after the closure of the Strait of Hormuz sent buyers in Asia and Europe scrambling for US supplies.
The US Energy Information Administration said that US exports of crude and petroleum products rose to about 12.9 million barrels per day last week, the highest level ever recorded. Kpler data also showed that US LNG shipments reached a record level last month.
Closure of the Strait of Hormuz prompts Asian and European buyers to buy cargoes of US crude
According to the Energy Information Administration, Dated Brent was trading more than $25 a barrel above front-month Brent futures in early April, apparently representing a very rare gap for two prices that typically remain much closer.
The premium increased because buyers needed real barrels quickly after traffic stopped in Hormuz. Shipments that should have crossed the strait became uncertain, so refiners had to find other supplies.
About 20 million barrels of oil and petroleum products were shipped daily through the strait before the war.
Environmental impact assessment He said“Slow declines in production of these crude oil grades have prompted most Brent price assessments to devise ways to incorporate West Texas Intermediate (WTI), priced at Midland in the US, into the basket of Brent crude grades in 2023.”
Front-month Brent crude futures are traded on the Intercontinental Exchange (ICE), as the main contract Brent Futures contracts because physical oil companies and financial traders use them.
Historic Brent tracks actual cargoes loaded on specific dates from selected North Sea terminals. It could also include a shipment of WTI delivered to Rotterdam on a CIF basis. After purchase, the oil is sent to the port, then to the refinery, where it is processed into fuels such as gasoline, diesel and jet fuel.
JP Morgan says oil prices have not yet risen enough to fill the supply gap
Natasha Caneva, an analyst at JPMorgan, said the oil market still needs higher prices to deal with the supply shock caused by higher oil prices. Iran war. Brent crude futures averaged around $100 per barrel in April, while actual freight rates traded near $121 per barrel. Both prices are still too low to reduce demand enough, Caneva said.
Caneva estimated the supply loss in April at 13.7 million barrels per day. Saudi Arabia and the United Arab Emirates usually increase production to alleviate this type of shortage, but the war prevented them from exporting through the Strait of Hormuz.
“Almost all of the world’s spare capacity is concentrated in Saudi Arabia and the UAE, and they have been effectively cut off from global oil markets, stripping the industry of its traditional shock absorber,” Caneva said.
Countries are now withdrawing from commercial and strategic oil reserves by about 7.1 million barrels per day, reducing the global gap to 6.6 million barrels per day. Demand is also expected to fall by 4.3 million barrels per day in April, especially in the Middle East and Asia, where Gulf supplies are more important, according to the bank.
“What is striking is that these losses occurred at prices that do not appear extreme by historical standards,” Caneva said. “However, higher prices are beginning to limit discretionary driving in the U.S., while higher airfare prices are beginning to dampen demand for aircraft.”
