US Crude Exports Soar to Record High Amid Middle East Crisis
US crude oil exports reached a record high in May at 5.6 million barrels per day, driven by increased demand from Asian and European refiners seeking alternatives to Middle Eastern supply due to the ongoing Iran war.
The conflict has disrupted global energy markets, with around one-fifth of the world's oil and gas supplies passing through the Strait of Hormuz, a key waterway that effectively closed when the war started in late February.
Benchmark US West Texas Intermediate prices traded at a steep discount to Brent, making it more economic for foreign buyers to purchase US oil and ship it across the world. WTI's discount to Brent averaged around minus $8.86 in April, compared to minus $4.85 before the war.
Asia took 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. Japan accounted for the lion's share of Asian imports, with 808,000 bpd, a 32% jump on the month and setting a record.
US 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. At least 283,000 bpd of US exports were oil barrels from the country's strategic petroleum reserve, released to combat spiking crude prices.
However, exports are set to ease in June as hopes of a peace deal have eased some supply concerns and narrowed WTI's discount to Brent. Energy Aspects estimates exports will average about 4.9 million bpd for June and 4.60 million bpd for July, down from May's record high.