US oil exports set to hit all-time high under Trump

US oil exports set to hit all-time high under Trump
American crude oil exports are poised to exceed four members of the Organization of Petroleum Exporting Countries (OPEC) this year, according to analysts polled by Bloomberg.

The United States, the world’s biggest oil consumer, could export at least 800,000 barrels per day (bpd), the analysts said. This exceeds oil exports of OPEC members Libya, Qatar, Ecuador, and Gabon. In 11 months of 2016, the US exported 527,000 bpd, according to the Energy Information Administration data.

Asset management firm Macquarie told Bloomberg US oil production would reach 9.37 million bpd after the 5.6 percent slump to 8.87 million in 2016. Turner, Mason & Co. and Lipow Oil Associates forecast American oil output will exceed nine million bpd, while Wood Mackenzie predicted a more conservative 8.75 million.

“Godzilla is even taller in person… US production will be bigger than most people are expecting,” Vikas Dwivedi, senior analyst at Macquarie told the media.

The US is neck-and-neck with China as the world's largest crude importer, buying 7.88 million bpd of crude last year. However, there is an explanation, why America is boosting exports, analysts said.

American refineries were designed to process dense and high-sulfur oil from Canada and parts of the Middle East and Latin America. The growth in US production mostly came from the Texas’ Permian Basin and Eagle Ford regions, which have oil of better quality, and local refiners can’t process it.

“If the US system can’t take the crude it produces, it will have to export it,” Macquarie’s Dwivedi told Bloomberg.

If OPEC continues to comply with the self-imposed cuts of 1.2 million bpd, the market may see even a larger amount of American oil, as Europe, Asia, and Latin America will seek new suppliers, said Andy Lipow, head of a Houston-based consulting company Lipow Oil Associates.

The 40-year-old ban on exports of American crude oil was lifted in late 2015.