U.S. crude oil exports reach historic highs, but are far from filling the Middle East supply gap
- The United States crude oil exports are expected to reach a record high in April and May (about 5.44 million barrels/day and 5.48 million barrels/day), a significant increase compared to pre-war levels. The newly added crude oil mainly flows to Asia, which is most affected by the blockade of the Strait of Hormuz. In May, exports to Asia are expected to reach 3.29 million barrels/day, about three times the pre-war amount.
- However, this is far from enough to fill the supply gap from the Middle East: in April, total seaborne crude oil exports to Asia decreased by about 10 million barrels/day compared to pre-war levels, and this shortage cannot be long-term offset by inventories. Although the United States also hit a new high in refined product exports, in April exports to Asia increased by only 254,000 barrels/day compared to January, while the loss in refined product supply from the Strait of Hormuz to Asia exceeded 1.5 million barrels/day.
- Domestic U.S. consumers will have to compete with overseas buyers for supplies, and part of the exports comes from strategic reserves, so they might decline in the future. Trump has called on importing countries to buy U.S. oil, but “adequate” supply remains far from enough, making it especially hard for Asia to adapt to the loss of Middle East supply.
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