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United States Sees 16% Drop in Petroleum Exports, Dipping to $121 Billion in 2023

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United States Sees 16% Drop in Petroleum Exports, Dipping to $121 Billion in 2023

U.S. Petroleum Exports

After two years of growth, overseas shipments of petroleum decreased by -3.4% to 186M tons in 2023. The total export volume increased at an average annual rate of +1.2% from 2013 to 2023; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2017 when exports increased by 7%. Over the period under review, the exports reached the maximum at 213M tons in 2018; however, from 2019 to 2023, the exports failed to regain momentum.

Read also: Top Import Markets for Petroleum Bitumen

In value terms, petroleum exports dropped significantly to $121B (IndexBox estimates) in 2023. In general, exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2022 when exports increased by 57% against the previous year. As a result, the exports reached the peak of $144.8B, and then declined sharply in the following year.

Exports by Country

Mexico (50M tons) was the main destination for petroleum exports from the United States, accounting for a 27% share of total exports. Moreover, petroleum exports to Mexico exceeded the volume sent to the second major destination, Canada (18M tons), threefold. Brazil (8.8M tons) ranked third in terms of total exports with a 4.7% share.

From 2013 to 2023, the average annual rate of growth in terms of volume to Mexico totaled +7.7%. Exports to the other major destinations recorded the following average annual rates of exports growth: Canada (-0.8% per year) and Brazil (+1.8% per year).

In value terms, Mexico ($36.8B) remains the key foreign market for petroleum exports from the United States, comprising 30% of total exports. The second position in the ranking was held by Canada ($13.3B), with an 11% share of total exports. It was followed by Chile, with a 4.8% share.

From 2013 to 2023, the average annual growth rate of value to Mexico stood at +6.7%. Exports to the other major destinations recorded the following average annual rates of exports growth: Canada (-0.8% per year) and Chile (+0.6% per year).

Export Prices by Country

In 2023, the petroleum price amounted to $652 per ton (FOB, US), which is down by -13.6% against the previous year. Overall, the export price saw a mild contraction. The most prominent rate of growth was recorded in 2022 an increase of 51% against the previous year. As a result, the export price reached the peak level of $754 per ton, and then reduced in the following year.

There were significant differences in the average prices for the major export markets. In 2023, amid the top suppliers, the country with the highest price was Peru ($815 per ton), while the average price for exports to India ($191 per ton) was amongst the lowest.

From 2013 to 2023, the most notable rate of growth in terms of prices was recorded for supplies to China (+1.0%), while the prices for the other major destinations experienced a decline.

Source: IndexBox Market Intelligence Platform 

Offshore drilling policy impacts shipments of export cargo and import cargo in international trade. feedstock

14% Increase in Offshore Drilling in North America makes USA’s Petroleum Liquid Feedstock Market Highly Important for the Economy

FMI anticipates that the global petroleum liquid feedstock market valuation could reach US$ 313 billion in 2023. As per the projection of the analysts, the market is likely to record a value of over US$ 474.1 billion by 2033, registering a CAGR of 4.2% between 2023 and 2033. Increase in oil & gas prices and the demand for aromatics and growth of the petrochemical industry and automotive fleet are expected to drive the global demand for petroleum liquid feedstock during the forecast period.

A significant area of the energy sector is the petroleum liquid feedstock market. This includes the supply and demand of different petrochemical products used as feedstock in multiple applications. It entails the production, refinement, and distribution of liquid petroleum products. They have various uses, such as the production of chemicals, polymers, and other industrial products as well as fuel for vehicles.

Global supply and demand, geopolitical unrest, and technical advancements are a few of the variables that have an impact on the liquid petroleum products market. The market is also subject to price volatility, with prices often fluctuating in response to changes in global economic conditions, production levels, and supply chain disruptions.

The market is significantly fueled by the petrochemical industry. An increase in petrochemical product utilization in end-use sectors has contributed to the petrochemical industry’s growth. Additionally, political and economic considerations have an impact on the price of oil and gas globally which shapes the market expansion.

The production and processing of aromatics are one of the main applications of petroleum liquid feedstock. Owing to their high usage as feedstock for several products, aromatic compounds like xylene, benzene, and toluene are in high demand from different end-use sectors including the chemical industries. This is likely to propel the market for petroleum liquid feedstock to expansion.

Naphthalene is a significant byproduct of petroleum liquid feedstock. The naphthalene products market is an important sub-segment of the petroleum liquid feedstock market and it has experienced significant growth lately. The increased demand for naphthalene products across different end-use sectors, such as textiles, plastics, and construction, is responsible for this expansion.

The growth in technological developments is another key market factor for the petroleum liquid feedstock industry. Specifically, the transportation industry is what drives demand for petroleum liquid feedstock. Local transportation uses naphtha and oil which are petroleum liquid feedstocks. They include motor vehicles, engine vehicles, and bunkers. Marine fuel is also used in the industrial and commercial sectors.

Naphtha is an important product within this market as it is a feedstock used in the production of various products. The naphtha products market is primarily driven by the petrochemical industry which uses naphtha as a feedstock for the production of plastics, synthetic rubber, and other chemicals. The growth of the petrochemical industry across the world has driven the demand for naphtha products in recent years. In addition to its use in the petrochemical industry, naphtha is also used as a fuel for power generation and as a blending component in gasoline production.

To produce low Sulphur fuels and high-value petrochemicals, the industry is witnessing a trend towards lighter and cleaner feedstock. Natural gas liquids (NGL) are being utilized more often as a petrochemical feedstock and as a crude oil alternative while biofuels and renewable feedstocks like biomass and waste oils are also becoming more significant.

The opportunities in the market are vast and varied. Expanding the uses of petroleum products as feedstock for new and ongoing applications in the petrochemical, refining, and energy industries is substantial potential. Developing new and innovative processing technologies to convert lower-value feedstocks into high-value products is another significant opportunity.

The Oil and Gas Sector in the United States Switches to Survival Mode

The United States petroleum liquid feedstock market is highly important for the economy of the country as it is one of the leading producers and consumers of petroleum products. The World Oil research of international petroleum ministries and departments predicted a 14% increase in offshore drilling in North America in 2022.

The availability of significant shale gas and crude oil deposits is likely to have a beneficial impact on the future of the United States industrial sector. For instance, according to the Energy Information Administration (EIA), proven crude oil reserves increased to 367 million barrels in 2019. The extensive shale resource development and the expanding use of data analytics to boost drilling and production are also anticipated to hasten the adoption of oil & gas analytics.

Nevertheless, factors including a drop in exploration and production activity and an increase in inventory costs limit market expansion. With growing concerns over climate change and the transition towards cleaner energy sources, the market is likely to face significant challenges during the forecast period.

For the first time since EIA started providing statistics on renewable diesel production, renewable diesel output topped biodiesel production in the January 2023 Petroleum Supply Monthly (PSM), which contains United States’ biofuel production data through November 2022.

Competitive Landscape

The global petroleum liquid feedstock market is highly fragmented with Tier-I players accounting for approximately 25%-35% of the global petroleum liquid feedstock market, while other global players along with several local players account for the remaining market share. Global market leaders in the petroleum liquid feedstock market are BP p.l.c., Exxon Mobil Corporation, TOTAL S.A., Royal Dutch Shell plc, Idemitsu Kosan Co., Ltd., Flint Hills Resources and YPF.

Key Market Players and Their Recent Developments in the Petroleum Liquid Feedstock Market

BP p.l.c. – The British Petroleum Corporation plc and BP Amoco plc were both renamed to become BP plc, a global oil and gas corporation with its headquarters in London. According to sales and earnings, it is among the top “supermajors” in the oil and gas industry. It is a vertically integrated business that engages in electricity generation, trading, distribution, and marketing, as well as oil and gas exploration and extraction.

In September 2022, the agreement to buy EDF Energy Services was announced by BP p.l.c. This increased BP’s market share in the retail electricity and gas market for the United States commercial and industrial (C&I) customers.

In August 2022, together, BP and Eni formally launched Azule Energy, a new independent joint venture that combines the two firms’ Angolan activities in a 50/50 split.

In February 2022, a strategic partnership between Nuseed and BP was formed to quicken the market’s acceptance of Nuseed Carinata as a low-carbon and sustainable biofuel feedstock.

Exxon Mobil Corporation – The ExxonMobil Corporation is a global oil and gas company with its headquarters in the United States. It was created on November 30, 1999, by the union of Exxon and Mobil. These two retail brands are still in use today with Esso for gas stations and downstream goods. The corporation is vertically integrated throughout the whole oil and gas sector. It also has a chemicals section that creates plastic, synthetic rubber, and other chemical goods.

In January 2023, ExxonMobil disclosed that it possessed a bulk stake in Imperial Oil Limited. The business will spend around US$560 million to advance the building of Canada’s leading renewable fuel facility.

In November 2022, ExxonMobil revealed the arrival of the first LNG cargo from the $8 billion Coral South floating LNG (FLNG) project off the coast of Mozambique, adding more LNG to the world energy market.

TotalEnergies – One of the seven supermajor oil corporations, TotalEnergies SA is a French multinational integrated energy and petroleum firm that was created in 1924. Its operations span the whole oil and gas value chain, from the exploration and extraction of crude oil and natural gas to the creation of electricity. Its maneuver also includes the movement of petroleum products across international borders and the sale of those products.

In January 2023, the Lapa South-West oil development, which is 300 km off the Brazilian coast in the Santos Basin, received TotalEnergies’ approval for the final investment decision. With a 45% ownership stake and a joint venture with Shell (30%) and Repsol Sinopec (25%), TotalEnergies manages the project. Three wells will be used to develop Lapa South-West.

In September 2022, in the Grandpuits (Seine-et-Marne) zero-crude platform, TotalEnergies and SARIA reached a partnership to develop sustainable aviation fuel.