It hasn’t taken long for American oil producers to start sending their wares to buyers all around the world. Three months ago the U.S. lifted its 40 year ban on crude oil exports, and now, Bloomberg reports, American oil can be found in ports all around the globe:
With American stockpiles at unprecedented levels, oil tankers laden with U.S. crude have docked in, or are heading to, countries including France, Germany, the Netherlands, Israel, China and Panama. Oil traders said other destinations are likely, just as supplies in Europe and the Mediterranean region are also increasing. […]
Oil traders are expecting more vessels to depart over coming weeks, with companies seeking to open new export routes from the U.S. West Coast and also moving barrels from new locations, including directly out of Cushing.
These exports are helping to relieve storage facilities in Cushing, Oklahoma, which thanks to tepid global demand and burgeoning shale supplies have been absolutely brimming with crude. They’re also helping to narrow the spread in prices between America’s oil benchmark, the West Texas Intermediate (WTI), and the stand-in for global prices, Europe’s Brent crude.
That, in turn, is helping U.S. producers better compete in today’s global market. WTI is currently trading around $2 below Brent, but that’s much smaller than the $10+ spread we’ve seen between the two benchmarks in recent years. Every dollar matters in today’s bearish market, especially for the relatively high-cost shale operations that have underpinned the recent U.S. energy renaissance. As America’s crude sets sail for ports afar, it’s also helping keep the shale boom going.