The United States could become a net exporter of crude in 2023, amidst sanctions against Russia’s exports of oil and natural gas following its invasion of Ukraine, and Washington’s massive release of oil from emergency reserves to combat surging gas prices.

Recall also that the US became the world’s largest liquefied natural gas (LNG) exporter during the first half of 2022, according to data from CEDIGAZ. Compared with the second half of 2021, U.S. LNG exports increased by 12per cent in the first half of 2022, averaging 11.2 billion cubic feet per day (Bcf/d). U.S. LNG exports continued to grow for three reasons; increased LNG export capacity, increased international natural gas and LNG prices, and increased global demand, particularly in Europe.

Sales of US crude to other countries have reached a record 3.4 million barrels per day (bpd), including some three million bpd of refined products, such as gasoline and diesel fuel.

The US having become the leading exporter of liquefied natural gas LNG, as increased sales are predicted for the next few years.

However, the US consumes 20 million barrels of crude a day, the highest amount globally, while its output has never exceeded 13 million bpd.

To become a net exporter of crude, it needs to boost production or reduce consumption, but as local petroleum demand is expected to rise 0.7 percent to 20.51 million bpd next year, production must increase.

Government data released in November showed net US crude oil imports fell to 1.1 million bpd, the lowest since records began in 2001 and down sharply from five years ago, when more than seven million bpd were imported.

The US already produces more oil than any other country, including Saudi Arabia and Russia.

According to data analytics firm Kpler, to offset losses of Russian oil, European refiners have snapped up US grades, and as more discounts to global benchmarks were offered, Asian refiners increased their purchases to 1.75 million bpd.

Export terminal operators are also increasing their capacity to service giant tankers, which can carry more than two million barrels of oil.

Sean Strawbridge, chief executive of the Port of Corpus Christi, the largest US oil export facility, said, “Russia has proven to be an unreliable supplier. That really creates a wonderful opportunity for American producers and American energy,” as quoted by Reuters.

In the first half of 2022, the US surpassed Qatar and Australia to also become the world’s largest exporter of liquefied natural gas, due to demand from Europe and surging prices.

Matt Smith, analyst at Kpler, said as Europe scrambles to refill storage depleted this winter, LNG exports will continue to rise in 2023, as reported by Reuters.

According to estimates by EIA, installed U.S. LNG export capacity has expanded by 1.9 Bcf/d nominal (2.1 Bcf/d peak) since November 2021. The capacity additions included a sixth train at the Sabine Pass LNG, 18 new mid-scale liquefaction trains at the Calcasieu Pass LNG, and increased LNG production capacity at Sabine Pass and Corpus Christi LNG facilities. As of July 2022, we estimate that U.S. LNG liquefaction capacity averaged 11.4 Bcf/d, with a shorter-term peak capacity of 13.9 Bcf/d.

International natural gas and LNG prices hit record highs in the last quarter of 2021 and first half of 2022. Prices at the Title Transfer Facility (TTF) in the Netherlands have been trading at record highs since October 2021. TTF averaged $30.94 per million British thermal units (MMBtu) during the first half of 2022. LNG spot prices in Asia have also been high, averaging $29.50/MMBtu during the same period.

Since the end of last year, countries in Europe have increasingly imported more LNG to compensate for lower pipeline imports from Russia and to fill historically low natural gas storage inventories. LNG imports in the EU and UK increased by 63per cent during the first half of 2022 to average 14.8 Bcf/d.

Most U.S. LNG exports went to the EU and the UK during the first five months of this year, accounting for 64per cent, or 7.3 Bcf/d, of the total U.S. LNG exports. Similar to 2021, the United States sent the most LNG to the EU and UK during the first half of the year, providing 47per cent of the 14.8 Bcf/d of Europe’s total LNG imports, followed by Qatar at 15per cent, Russia at 14per cent, and four African countries combined at 17per cent.

In June, the United States exported 11% less LNG than the 11.4 Bcf/d average exports during the first five months of 2022, mainly as a result of an unplanned outage at the Freeport LNG export facility. Freeport LNG is expected to resume partial liquefaction operations in early October 2022.

Utilisation of the peak capacity at the seven U.S. LNG export facilities averaged 87per cent during the first half of 2022, mainly before the Freeport LNG outage, which is similar to the utilization on average during 2021.

Source: Big News Network/ EIA