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The Trans Mountain Expansion Project, now finally completed and operational after years of delays, is changing the fortunes of the oil sands.
Canada’s oil sands producers have started ramping up production last year in anticipation of the start-up of exports through the TMX pipeline.
The production increases in the oil sands are the result of the expansion of operational projects with existing infrastructure.

Canada’s oil output is booming as producers ramp up projects and extraction amid expanded market access and narrowing discounts of the Canadian heavy crude to the U.S. benchmark.

The Trans Mountain Expansion Project, now finally completed and operational after years of delays, is changing the fortunes of the oil sands producers in Alberta, giving them access to markets in Asia and the U.S. West Coast.

Constrained for years due to insufficient egress, Canada’s oil now has nearly 600,000 barrels per day (bpd) of additional market access. The expanded Trans Mountain pipeline is tripling the capacity of the original pipeline to 890,000 bpd from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.

And producers are taking advantage of this. They began ramping up production at the end of last year in anticipation of the Trans Mountain Expansion (TMX) start in the first half of this year. Canadian oil firms now get more bang for their buck as the discount of Western Canada Select (WCS), the benchmark for Canadian heavy crude sold at Hardisty in Alberta, has narrowed relative to the U.S. crude oil benchmark, West Texas Intermediate (WTI) in recent weeks.

Moreover, the production increases in the oil sands are the result of the expansion of operational projects with existing infrastructure, so the capital expenditure – which is very high for this type of crude extraction – has been lower than for building projects from scratch.

…click on the above link to read the rest of the article…

Libya Oil Exports Halted

July 4, 2022

Libya Oil Exports Halted

BofA: Sharp Decline In Russian Exports Could Send Oil Above $150

May 31, 2022

BofA: Sharp Decline In Russian Exports Could Send Oil Above $150

Analysts: Asian buyers are unlikely to be able to absorb all the Russian oil unwanted in the West.
There is a distinct possibility of a sharp drop in Russian oil exports.
BofA: A sharp contraction in Russian oil exports could push Brent well past $150/bbl.

Brent Crude prices could jump to well above $150 per barrel if Russia’s oil exports fall off a cliff in the coming months, according to Bank of America.

“With our $120/bbl Brent target now in sight, we believe that a sharp contraction in Russian oil exports could …. push Brent well past $150/bbl,” analysts at Bank of America (BofA) Global Research wrote in a research note on Friday carried by Reuters.

In a base-case scenario, Bank of America expects Brent Crude prices to average $104.48 a barrel this year and $100 a barrel in 2023.

Early on Friday, Brent Crude was trading at over $117 per barrel, the highest in two months, amid tight fuel supplies globally and bullish prospects of demand with the U.S. driving season beginning with the Memorial Day holiday weekend and Shanghai in China set for gradual reopening from June 1st.

There is a distinct possibility of a sharp drop in Russian oil exports as the EU continues to seek consensus and persuade Hungary to drop its opposition to a Russian oil embargo. Reports have it that some EU member states are inclined to accept a temporary exemption of Russian pipeline supply to central Europe via the Druzhba pipeline from the embargo as a bargaining chip to convince Hungary to agree to a ban on imports of Russian seaborne oil.

…click on the above link to read the rest of the article…

Mexico to Stop Exporting Oil in 2023 in Self-Sufficiency Quest

December 31, 2021

Mexico to Stop Exporting Oil in 2023 in Self-Sufficiency Quest

Octavio Romero, CEO of PEMEX, speaks during an interview. (Alejandro Cegarra/Bloomberg)

Mexico plans to end crude oil exports in 2023 as part of a strategy by the nationalist government of Andres Manuel Lopez Obrador to reach self-sufficiency in the domestic fuels market.

Petroleos Mexicanos, the Mexican state-owned producer known as Pemex, will reduce crude oil exports to 435,000 barrels a day in 2022 before phasing out sales to clients abroad the following year, CEO Octavio Romero said during a press conference in Mexico City on Dec. 28.

The move is part of a drive by Lopez Obrador to expand Mexico’s domestic production of fuels instead of sending its oil abroad while it imports costly refined products, including gasoline and diesel. Mexico currently buys the bulk of the fuels it consumes from U.S. refineries.

If fulfilled, Pemex’s pledge will mark the withdrawal from the international oil market by one of its most prominent players of the past decades. At its peak in 2004, Pemex exported almost 1.9 million barrels a day to refineries from Japan to India, and was a participant in meetings by the Organization of Petroleum Exporting Countries as an observer.

Last month, the Mexican company sold abroad slightly more than 1 million daily barrels, according to Pemex data.

The export reduction will come as Pemex increases its domestic crude processing, which will reach 1.51 million barrels a day in 2022 and 2 million daily barrels in 2023, Romero said. The Mexican driller will plow all of its production into its six refineries, including a facility under construction in the southeastern state of Tabasco and another one being bought near Houston, Texas. This plant is considered part of Mexico’s refining system even if located across the U.S. border.

…click on the above link to read the rest of the article…

Iran Opens Export Terminal To Bypass World’s Biggest Oil Chokepoint

July 25, 2021

Iran Opens Export Terminal To Bypass World’s Biggest Oil Chokepoint

Iran says it has opened its first oil export terminal in the Gulf of Oman to allow Tehran to avoid using the strategic Strait of Hormuz shipping route that has long been a focus of regional tensions.

“Today, the first shipment of 100 tons of oil is loaded outside the Strait of Hormuz,” President Hassan Rohani said in a televised speech on July 22, calling it an “important step for Iran” that will “secure the continuation of our oil exports.”

The new terminal, located near the port city of Jask, will allow tankers headed into the Arabian Sea and beyond to avoid the Strait of Hormuz at the head of the Persian Gulf, through which one-fifth of world oil output passes.

Rohani said Iran aimed to export 1 million barrels per day of oil from the facility, which officials said will cost some $2 billion.

Oil Minister Zanganeh said that “82 percent of this project has been completed and so far more than $1.2 billion has been spent on this.”

Iran’s main oil export terminal is located at Kharg inside the narrow strait, which is patrolled by warships of its arch-foe, the United States.

There have been periodic confrontations between Iran’s Islamic Revolutionary Guards Corps (IRGC) and the U.S. military in the area.

Iran has often threatened to block the Strait of Hormuz if its crude exports were shut down by U.S. sanctions, which have heavily impacted Iranian energy exports.

Washington reimposed the sanctions more than three years ago when then-President Donald Trump withdrew the United States from the 2015 nuclear deal between Tehran and world powers.

Tehran and U.S. President Joe Biden’s administration have been in indirect talks in Vienna since April to try to revive the agreement, under which Iran agreed to curb its nuclear program in return for the lifting of most international sanctions.

Crude Oil Flow From Saudi Arabia To U.S. Falls To Zero

January 7, 2021

Crude Oil Flow From Saudi Arabia To U.S. Falls To Zero

For the first time in 35 years, no oil flowed from Saudi Arabia to the United States last week, according to EIA data, in a show that the United States—at least for now—isn’t as reliant on oil from the Middle East like it used to be.

In October, according to the EIA, the United States imported 8.544 million barrels. In June, that figure was more than 36 million, although that figure was a bit of an anomaly as Saudi Arabia threatened to flood the U.S. market with crude oil.

In much of the early 2000s, the United States imported more than 45 million barrels of Saudi crude oil on a monthly basis.

Source: EIA

On a weekly basis, that figure has now fallen to zero.

Source: EIA

And the U.S. imports of crude oil are not just falling from Saudi Arabia. Through October, the United States imported significantly less crude oil from the Persian Gulf region.

In the early 2000s, the United States was importing more than 3 million barrels of crude oil per day from the Persian Gulf region. In October 2020, the United States imported less than a half a million barrels per day—and that figure isn’t an anomaly, it’s a clear trend. The United States is relying less and less on foreign oil, and particularly less and less on oil from the Persian Gulf.

Source: EIA

The data comes just as Saudi Arabia announced a voluntary million-barrel-per-day cut to its oil production as the OPEC+ group sat down to the negotiating table to hatch a plan to react to the oil market and the lack of demand.

It also comes on the same day that Saudi Arabia announced a crude oil price increase for the United States for February by $0Mor.20 per barrel.

THE COMING MIDDLE EAST OIL CRISIS: The Collapse Of Net Oil Exports

April 12, 2019

THE COMING MIDDLE EAST OIL CRISIS: The Collapse Of Net Oil Exports

The Middle East is heading for a crisis in its oil industry. Unfortunately, the market doesn’t realize there is any danger on the horizon because it mainly focuses on how much oil the Middle East is producing rather than its exports. You see, it doesn’t really matter how much oil a country produces but rather the amount of its net oil exports.

A perfect example of this is Mexico. As I mentioned in a recent article, NEXT OIL DOMINO TO FALL? Mexico Becomes A Net Oil Importer, Mexico is now a net importer of oil for the first time in more than 50 years. Furthermore, the IEA – International Energy Agency, published in their newest OMR Report that Mexico is forecasted to lose another 170,000 barrels per day of oil production in 2019. Thus, this is terrible news for the United States southern neighbor as it will have to import even more oil to satisfy its domestic consumption.

Now, when we think of the Middle East, we are mostly concerned with its oil production. However, the Middle Eastern countries, just like Mexico, have been increasing their domestic consumption, quite considerably, over the past 40+ years. How much… well, let’s take a look. Since 2000, total Middle East domestic oil consumption jumped from 5.1 million barrels per day (mbd) to 9.3 mbd in 2017:

As we can see, while Middle East oil production increased by 7.9 mbd from 2000 to 2017, domestic consumption expanded by 4.2 mbd. This means that more than 50% of the Middle East’s production growth during this period was absorbed by domestic use. The next chart shows how the changes in the regions oil production and consumption impacted net oil exports.

…click on the above link to read the rest of the article…

U.S. ‘’Oil Weapon’’ Could Change Geopolitics Forever

March 21, 2019

U.S. ‘’Oil Weapon’’ Could Change Geopolitics Forever

In a dynamic that shows just how far U.S. oil production has come in recent years, the U.S. Energy Information Administration (EIA) said on Monday that in the last two months of 2018, the U.S. Gulf Coast exported more crude oil than it imported.

Monthly net trade of crude oil in the Gulf Coast region (the difference between gross exports and gross imports) fell from a high in early 2007 of 6.6 million b/d of net imports to 0.4 million b/d of net exports in December 2018. As gross exports of crude oil from the Gulf Coast hit a record 2.3 million b/d, gross imports of crude oil to the Gulf Coast in December—at slightly less than 2.0 million b/d—were the lowest level since March 1986.

U.S. oil production hit a staggering 12.1 million b/d in February, while that amount has been projected to stay around that production mark in the mid-term then increase in the coming years. The U.S. is the new global oil production leader, followed by Russia and Saudi Arabia, while Saudi Arabia is still the world’s largest oil exporter – a factor that still gives Riyadh considerable leverage, particularly as it works with Russia, and other partners as part of the so-called OPEC+ group of producers. However, Saudi Arabia’s decades-long role of market swing producers has now been replaced by this coalition of producers, reducing Riyadh’s power both geopolitically and in global oil markets. In short, what Saudi Arabia could once do on its own, it has to do with several partners.

Meanwhile, U.S. crude oil production, particularly in the Gulf Coast region, is still increasing. In November 2018, U.S. Gulf Coast crude oil production set a new record of 7.7 million b/d, the IEA report added.

…click on the above link to read the rest of the article…

No, The U.S. Is Not A Net Exporter Of Crude Oil

December 14, 2018

No, The U.S. Is Not A Net Exporter Of Crude Oil

Last week Bloomberg created quite a stir with this story: The U.S. Just Became a Net Oil Exporter for the First Time in 75 Years. I have seen a number of follow-up stories that praised the significance of this development, but others laughed it off as misleading or incorrect.

There is some truth to both viewpoints. Yes, the headline is somewhat misleading and requires some context. But there continues to be a trend in the direction of energy independence for the U.S. So, today I want to break down the numbers so readers can understand the truth about U.S. petroleum production, consumption, and exports.

Domestic Crude Production Has Surged

The Bloomberg story is based on data from the Energy Information Administration (EIA). Each week the EIA publishes detailed statistics on U.S. oil production, consumption, exports, and inventories in a report called the Weekly Petroleum Status Report. So, let’s go straight to the source.

For the week ending 11/30/18, the EIA reported that the U.S. produced 11.7 million barrels per day (BPD) of crude oil. That represents a 2 million BPD increase from the year-ago number. This number is generally accepted even by those who believe the Bloomberg headline was misleading.

Further down in the report, the category of Products Supplied is listed at 20.5 million BPD. This is approximate U.S. crude oil consumption for the week. Thus, as some skeptics of the story suggested, the bottom line is that the U.S. is burning more than 20 million BPD while producing less than 12 million BPD. Thus, the conclusion for some was that the U.S. isn’t close to being energy independent.

Other Supply

But there is important context between these numbers. First, the 20.5 million BPD is a fairly accurate representation of U.S. consumption, but there is a large U.S. production number that isn’t included in the crude oil production numbers.

…click on the above link to read the rest of the article…

Saudis Reportedly Target US Inventories By Slashing Oil Exports

December 13, 2018

Saudis Reportedly Target US Inventories By Slashing Oil Exports

WTI prices briefly popped above $52 before fading quickly after Bloomberg reported that after flooding the US market in recent months, Saudi Arabia plans to slash exports starting in January in an effort to dampen visible build-ups in crude inventories.

Bloomberg reports that, according to people briefed on the plans of state oil company Saudi Aramco, American-based oil refiners have been told to expect much lower shipments from the kingdom in January than in recent months following the OPEC agreement to reduce production.

Oil traders were not that impressed…

And while the plan to slash Saudi exports to America may ultimately convince a skeptical oil market about the kingdom’s resolution to bring supply and demand incline, it may anger President Trump, who has used social media to ask the Saudis and OPEC to keep the taps open.

✔

Hopefully OPEC will be keeping oil flows as is, not restricted. The World does nott want to see, or need, higher oil prices!

Does The U.S. Really Need Saudi Oil?

November 23, 2018

Does The U.S. Really Need Saudi Oil?

“Saudi Arabia — if we broke with them, I think your oil prices would go through the roof. I’ve kept them down,” President Trump told reporters on Tuesday. “They’ve helped me keep them down. Right now we have low oil prices, or relatively. I’d like to see it go down even lower — lower.”

Oil prices have indeed fallen significantly in recent weeks, and to be sure, Saudi Arabia has played a large role in that. Saudi production reportedly hit a record high 11 million barrels per day (mb/d) at times this month, and global inventories are rising once again.

But Riyadh is also clearly upset at being “duped” by Trump. Having been convinced by the Trump administration that Iran’s oil exports were heading to zero, or at least close to zero, Saudi Arabia ramped up supply to offset the losses.

The U.S. then surprised the market by issuing a bunch of waivers, allowing Iran to continue to export oil. Japan and South Korea may even resume buying oil from Iran in January, after cutting imports to zero in anticipation of sanctions.

Almost immediately after the waivers were issued, oil prices crashed. Saudi Arabia then promptly announced that it would cut production by 500,000 bpd in December, and the rumors of an OPEC+ cut really began to pick up.

Trump is happy about the slide in oil prices, but Saudi Arabia clearly isn’t. Saudi Arabia and its OPEC+ partners could soon take action to push prices back up. So, it isn’t clear that Washington and Riyadh have the same objectives, or that their tight relationship is resulting in lower oil prices.

…click on the above link to read the rest of the article…

Sino-Russian interdependence will be based on oil

November 18, 2018

Sino-Russian interdependence will be based on oil

Although Beijing is Moscow’s largest trading partner, while Russia only ranks in the second ten among China’s importers, the Kremlin is strategically the most important contractor because it supplies the most desirable product – oil – and Chinese demand for this raw material is growing. It appears that an increase in Russian oil exports to China will be at the expense of European consumers.

Chinese oil production has been falling since 2015, and yet enormous infrastructure investments and huge strategic petroleum reserves (SPR) boost the demand for it. No wonder then that in 2017, Beijing became the largest importer of crude oil, overtaking the United States. Currently, China’s consumption of product is approaching 13 million barrels per day. In the March Gefira we predicted that the PRC will have become the largest consumer of this raw material by 2025, accounting for 18-20% of the global consumption.¹⁾And Russia has an important role to play because already in 2016 it became China’s most important oil supplier, replacing Saudi Arabia.

China has been buying more and more Russian oil in the last decade, even though the Kremlin does not increase its export volume, which is around 5 million barrels per day. In 2009, countries such as Poland and the Netherlands imported more Russian crude oil than Beijing, but in 2015 they were overtaken by China, which in 2017 had an over 20% share in the Russian exports of this raw material.

In recent years, an increase in the Sino-Russian trade balance has been noticeable. While a decade ago, the total turnover was less than 45 billion USD, in the last year this result was almost twice as high: 84 billion USD. During the November meeting of the prime ministers of both countries, it was announced that the target would be to reach the level of 200 billion USD, with the energy industry, mainly oil and gas, being the main factor in the balance sheet growth.²⁾

…click on the above link to read the rest of the article…

Saudis Cut Oil Exports To U.S. To Boost Crude Prices

November 17, 2018

Saudis Cut Oil Exports To U.S. To Boost Crude Prices

Saudi Arabia has been slashing oil exports to the United States over the past two months, in what looks like a move to force a reduction in the world’s most transparently reported inventories that could put the Saudis on a collision course with U.S. President Donald Trump, who has repeatedly said that oil prices should be much lower.

The Saudis started to reduce shipments to the United States in September, and this month they are loading around 600,000 bpd on cargoes en route to the United States, down from more than 1 million bpd in July and August for example, CNBC reports, quoting figures from ClipperData.

According to ClipperData estimates, Saudi oil exports to the United States could soon reach their lowest levels on record.

The Saudi tactic to send reduced volumes to the States—which regularly reports every week crude oil inventories—succeeded last year.

Reduced Saudi oil imports tend to reflect in lower weekly U.S. inventories, while in the past weeks, crude builds have been weighing on oil prices, together with fears of an oversupplied global market and signs of slowing economic and oil demand growth.

“It worked so well in 2017 for [the Saudis] to cut flows to the U.S. because people could see the inventories dropping because U.S. data is so timely and transparent,” Matt Smith, head of commodities research at ClipperData, told CNBC.

Due to seasonally lower demand, Saudi Arabia will reduce its supply to the global markets by 500,000 bpd in December compared to November, Energy Minister Khalid al-Falih said this weekend. On Monday, al-Falih affirmed that OPEC will do ‘whatever it takes’ to balance the market, admitting that the cartel’s analysis shows that another cut of 1 million bpd may be required.

…click on the above link to read the rest of the article…

Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start

November 6, 2018

Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start

The US on Monday (Nov 5) is reimposing disciplinary measures targeting Iran’s oil, shipping, insurance, and banking sectors in what US Secretary of State Mike Pompeo called “the toughest sanctions ever placed” against Iran. In response, Tehran has reportedly turned off all oil tanker tracking systems as the sanctions take effect today.

Analysts at TankerTrackers.com, a watchdog that monitors production, refinement, shipping, and trading of crude oil on a global scale, revealed in late October all Iranian tanker vessels turned off their transponders to avoid international tracking for the first time since 2016.

“It’s the first time I’ve seen a blanket black-out. It’s very unique,” TankerTrackers co-founder Samir Madani told Sputnik News.

Madani said with the transponders turned off, the vessels can only be monitored using private satellite imagery. He believes that such a shift to lesser transparency is a ploy by Iran’s leadership to keep the international supply chains open amid US sanctions.

“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” said co-founder Lisa Ward.

The analysts suggested that going dark could pose significant problems in pinpointing the date when a tanker loaded its crude cargo.

Between 2010 and 2015, when Iran was slapped with international sanctions, its oil industry discovered that it could keep crude on tankers off the Gulf coast to avoid supply chain disruptions.

According to TankerTrackers.com’s research, there are currently six tankers with a total capacity of 11 million barrels moored offshore as floating storage, which allows Iran to continue deliveries.

Iran is the third-largest oil producer in OPEC, and the country’s First Vice-President Eshaq Jahangiri revealed in late October that Tehran had been exporting 2.5 million barrels per day over the past few months, said Sputnik.

…click on the above link to read the rest of the article…

Saudi Update October 2018

October 31, 2018

Saudi Update October 2018

We do not know where the Khashoggi case will go but what is happening in Saudi Arabia is important for the world.

Jodi data up to Aug 2018, released 19/10/2018 http://www.jodidb.org

Major_crude_exporters_Oct2018 Fig 1: Saudi Arabia is crude exporter #1

Note that these are gross exports. The US (which is a net importer of crude) is shown for comparison.

SaudiArabia_crude_prod_exports_2002-Aug2018_Jodi Fig 2: Saudi crude production and exports

Crude oil exports (red line) have been on a bumpy plateau between 7-8 mb/d since 2011, but in 2018 were actually lower than in 2005 when global crude production first peaked. Increases in production (black line) were modest (compared to Saudi’s claimed reserves of 266 Gb) and mainly used domestically:

Saudi_crude_use_exports_2002-Aug2018 Fig 3: Use of Saudi crude production (stacked)

The light green area is stock build, the dark red area stock draw (sitting on top of the production curve) and used as refiner intake. See Fig 8 for more details.

Saudi_direct_burn_2009-Aug2018 Fig 4: Saudi direct crude burn in power plants

This is highly seasonal between 300 kb/d in winter and 600 kb/d in summer.

…click on the above link to read the rest of the article…

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