U.S. crude oil exports reach record high as Asian and European buyers substitute Middle East supply

According to U.S. government data released on Wednesday, April 15, U.S. crude oil exports in the week ended April 10 surged to a record high. The reason is that Asian and European countries stepped up purchases of U.S. crude to replace supply from the Middle East disrupted by the Iran conflict. Specifically, in the week ending April 10, U.S. crude oil exports reached 5.2 million barrels per day, up by more than 1 million barrels per day from the previous week. Additionally, the United States exported around 7.5 million barrels of refined petroleum products such as gasoline and fuel oil, as many countries rushed to source substitutes amid a worsening global supply shortage. Exports rose sharply while crude imports into the United States fell sharply, pulling inventories lower, contrary to earlier forecasts by many analysts. This information helped U.S. oil prices reverse higher in Wednesday morning trading after opening lower. At one point, WTI futures in New York rose to $92.12 per barrel, up about 1%, before settling at $91.29 per barrel. The record-high export level underscores increasing global market tightness due to disruptions in Middle East supply. As Asian and European buyers boost purchases to make up for the shortfall, U.S. energy prices are expected to rise further and exert inflationary pressure on the economy. Analysts say that if U.S. oil exports remain elevated while Middle East supply continues to weaken amid the closure of Hormuz Strait, U.S. gasoline and diesel prices could climb further. This scenario would also raise political pressure on the Republican Party and could force the White House to consider export controls. “Asia and Europe are looking to replace Middle East supply, so U.S. oil is a natural choice,” said Edward Hayden-Briffett, a research analyst at The Officials, a division of Onyx Capital Group, in an interview with the Financial Times. Hayden-Briffett noted that many ships have been scheduled to load oil at U.S. Gulf Coast ports in the coming weeks, suggesting U.S. exports could stay high. AAA data show that since the conflict began on February 28, the average U.S. gasoline price has risen by about $1 to $4.10 per gallon. Diesel prices are around $5.63 per gallon, approaching the historical high of $5.81. During the 2024 campaign, Trump pledged to cut energy costs for consumers by half within a year of taking office. Since then, however, electricity, home heating oil, and gasoline prices have risen more than the general inflation rate. Rapidan Energy Group cautions that if oil prices approach $150 per barrel, the likelihood of export restrictions increasing. Although the government has repeatedly assured that export restraints are not under consideration, if forthcoming peace talks with Iran fail to yield results, oil prices could spike, potentially forcing the White House to seriously consider export controls, Rapidan analysts said in a report earlier this week.