By Arathy Somasekhar
HOUSTON (Reuters) -U.S. crude oil exports eased in July to the lowest levels in nearly four years on low domestic supplies and as Asian and European buyers found cheaper alternatives, undermining U.S. President Donald Trump‘s push for more foreign countries to purchase U.S. energy supplies.
The decline in exports from the top global producer underscores the extent to which oil flows are dictated by price and the economics of shipping, even as the Trump administration recently has pushed countries to commit to more U.S. oil purchases as part of trade negotiations.
U.S. crude exports tumbled to about 3.1 million barrels per day (bpd) in July, the lowest since October 2021, when the COVID-19 pandemic ravaged demand, according to data from ship tracking firm Kpler.
Exports averaged 3.2 million bpd over the last five weeks, compared with 3.6 million bpd in June, according to the U.S. Energy Information Administration. The decline came as the spread between European and U.S. benchmark crude futures narrowed, making it less economically attractive to ship barrels across the Atlantic.
“Markets are driven by economics, and companies are driven by profits, and so companies are going to continue to purchase what is the cheapest or the best feedstock for them,” said Matt Smith, lead oil analyst at Kpler.
“There’s a very, very incremental impact (from trade agreements on U.S. crude exports), but it’s not going to move the needle,” Smith added.
WTI’s discount to Brent in May and June, when oil delivered in July is traded, averaged about $3 a barrel, well above the $4 discount that typically encourages foreign countries to buy U.S. oil.
“There’s just not the incentive there to be pushing those barrels out. They’re more needed at home than they are abroad,” said Smith.
Exports of U.S. crude to Asia fell to 862,000 bpd in July, the lowest since January 2019, and well below the three-month average of 1.1 million bpd, Kpler data showed.
China, the world’s top oil consumer, took no barrels for the fifth straight month as trade tensions continued between the two countries, while shipments to South Korea, the second largest buyer of U.S. crude in 2024, nearly halved in July, and those to India fell 46%.
Meanwhile, exports to Europe fell 14% to 1.6 million bpd from June.
Inventories of oil at the key storage hub in Cushing, Oklahoma, hovered just above operational levels, amid lower Canadian oil flows due to a wildfire and last year’s Trans Mountain pipeline expansion. That kept more domestic barrels in the U.S., traders and analysts said.
