The World Can't Get Enough U.S. Energy

The Wall Street Journal reports The World Can't Get Enough U.S. Energy, Keeping Prices High for Americans

For now, the U.S. has been able to meet needs at home and replace some of the missing Gulf barrels. No nation in the world's history has ever exported as much energy: It shipped 14.2 million barrels of crude and products a day late last month—the rough equivalent of one out of seven barrels consumed globally in ordinary times.

But trouble is brewing. U.S. oil producers are barely stepping up their output, refineries are running at full-throttle, and domestic stocks are getting depleted fast. The upshot: American consumers are set to keep paying more for fuel to stay inside the U.S.'s borders.

"This is all just going to end so badly," said Matt Smith, director of commodity research at commodities- and shipping-data provider Kpler. "We have to essentially get squeezed to the point where prices move higher to stop the barrels leaving."

The administration has said it wouldn't impose a ban on energy exports. Energy Secretary Chris Wright said on CNBC last week that the U.S.'s economic future depends on selling its energy abroad and that this was a top item on the Trump agenda. 

"We can't be a major energy exporter to the world if we decide sometimes to stop exporting our energy," he said. 

The ports of New York, Philadelphia and Albany, N.Y., exported 174,000 barrels a day of gasoline, diesel and other petroleum products last month, according to Kpler. That is 10 times the volumes they shipped over the same period last year. Halfway through May, the pace of exports is even higher, well over 200,000 barrels a day—the highest monthly pace on Kpler's records since 2017.

The red-hot exports from that region are a sign that refiners on the Gulf Coast are likely running out of dock capacity at loading terminals, said Brian Stetter, director of Americas fuels and refining at S&P Global. It appears companies are sending their barrels up the Colonial Pipeline, a major conduit that transports about 45% of all fuel consumed on the East Coast, he said.

Diesel has been in especially high demand. The U.S. exported some 1.86 million barrels at one point earlier this month, according to the Energy Information Administration, the highest volume ever. The swelling shipments have brought stocks of diesel and other fuels on the Gulf Coast down by nearly 19% from prewar levels, according to the EIA.