22 Feb 2019 : Crude oil exports from the U.S. Gulf continue to increase as tight oil production grows. The Energy Information Administration (EIA) estimates that the U.S. produced 11.9 million barrels per day (Mb/d) of crude oil in November 2018 of which 6.96 Mb/d was tight oil. This compares to a total production of 10.1 Mb/d (5.62 Mb/d tight oil) in November 2017, an increase of 1.8 Mb/d of which 1.3 Mb/d in tight oil. Over this period, crude oil exports increased from 1.54 Mb/d to 2.33 Mb/d. Almost all of these exports were from the U.S. Gulf area, only about 0.2 Mb/d was exported from the Mid-West to Canada by pipeline or rail. The main destinations for U.S. crude oil are Europe and Asia. VLCCs have been the vessel of choice for the long-haul voyages to Asia, but recently have also been used for several voyages to Europe. This week we will look at this emerging VLCC trade and explore what the long-term viability for this trade is.
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