U.S. oil exports trade discount for market share

Deliveries to Europe, India, China, South Korea and beyond as demand rises

Of all the major grades for crude oil traded on the international markets, only Western Canadian Select, the Canadian benchmark, is currently cheaper than U.S. West Texas Intermediate (WTI) crude. But without transportation options to coastal terminals, Canadian oil is exported almost exclusively into the United States, which received between 97% and 99% of total Canadian crude oil exports since 2012.

Following the 1973-74 oil crisis, the U.S. restricted crude oil exports until 2015, when the Federal Government lifted the ban — changing the global oil market supply make-up in a major way.

The U.S. exported nearly 2 million barrels a day in the first week of October 2017 — approximately the same volume as the oil originating from Europe’s North Sea. With a nearly $6 U.S. per barrel price differential between the WTI and Brent benchmarks, refineries are purchasing WTI on the open market when they can get it.

The bulk of crude exported by the U.S. in late September 2017 went to East Asia, Northwest Europe and the Mediterranean region, with India receiving its first ever shipment of U.S. crude.

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