US oil exports are growing only three months after lifting of embargo

Bloomberg/Fuel Fix:
Three months since the U.S. lifted a 40-year ban on oil exports, American crude is flowing to virtually every corner of the market and reshaping the world’s energy map.

Overseas sales, which started on Dec. 31 with a small cargo aboard the Theo T tanker, have been picking up speed. Oil companies including Exxon Mobil Corp and China Petroleum and Chemical Corp have joined independent traders such as Vitol Group and Trafigura Pte in exporting American crude.

The “growing volumes of exports” from the U.S. are now “spooking the markets,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. in London, said in a note. The “flurry of export activity” is helping to support spot oil prices in the U.S. relative to contracts for later delivery, she wrote.

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.

That said, the U.S. is likely to remain for the foreseeable future a small exporter compared with OPEC giants Saudi Arabia, Iran and Iraq and non-OPEC producers Mexico and Russia. Ian Taylor, chief executive of Vitol, the company behind the first export, believes exports will remain a “very marginal business.”

Yet, tanker by tanker, overseas sales are growing.
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I see no reason why the US might not surpass Iran as an exporter.  It is a more reliable supplier and its prices are lower than other producers.  There is also less danger that the money from the sales will be used to fund terrorist organizations like Hezballah.

US production also has cheaper pipeline rates to move the oil to ports for transport.  The exports also will ease the storage problem caused by the glut in the US.

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