The United States is projected to lose its status as a net petroleum exporter this year as refiners and other customers seek out more product from elsewhere amid ballooning demand.
This change in trade dynamics would disrupt what the Energy Information Administration described as the “historic shift” that took place in 2020, when the U.S. became a net exporter of petroleum products due to its strong production output and the effects the COVID-19 pandemic had on oil markets.
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“During 2020, COVID-19 mitigation efforts caused a drop in oil demand within the United States and internationally. International petroleum prices decreased in response to less consumption, which diminished incentives for key petroleum-exporting countries to increase production,” the EIA said in detailing data from its recent Short-Term Energy Outlook.
Now, demand is back, and the U.S. is expected to bring in an average of 3.9 million barrels of oil per day on an average basis for the year, building on the 19% growth in net crude oil imports in 2021.
Jacques Rousseau, a managing director at ClearView Energy Partners, said the trade balance is largely determined by what refiners want.
“U.S. refiners want more oil, but they don’t necessarily want the oil produced in the United States,” Rousseau said. “The U.S. produces mostly light oil, and many U.S. refiners prefer to process heavier oils.”
The shift does not reflect a fall for U.S. oil production, which is rising and leads the world, in contrast to President Joe Biden’s green energy agenda.
Biden made moves early in his tenure to restrict the expansion of domestic fossil fuel development but has been rebuffed by the courts on some initiatives, including on his moratorium on new oil and gas leases on federal lands.
Facing rising energy costs and broader inflation, the administration has since pressed domestic producers to drill more with oil prices at their highest levels since 2014, and output is rising.
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Domestic production averaged 11.6 million barrels per day for the week ending Feb. 11, a 6% rise compared to the same week last year.
Daily output for the year is also expected to return nearly to 2019 levels and go on to reach a record next year.
