OPEC shipments to US at 30 year low
OPEC crude oil shipments to the world’s largest economy sank to a thirty-year low as part of an effort by the cartel and its allies to balance supplies and counteract America’s shale boom.The US has also placed sanctions on the Venezuelan oil that is being produced to put pressure on the Maduro regime. OPEC imports could shrink dramatically in the coming years as new infrastructure allows the shale wells in the US to access markets. A change in refinery operations to handle the light crude from the shale wells could eventually eliminate the need to import the heavy crude from OPEC.
OPEC supply cuts that started in 2017 were extended in 2018. The end result was Saudi Arabia cutting exports to the U.S. by 9 percent to about 870,000 barrels a day in 2018. OPEC as a whole sent 17 percent less than the year before, and the least since 1987, according to the latest U.S. government data.
Rapid production growth in the prolific Permian oil patch also sapped interest among American refiners for OPEC’s deliveries. With the help of light oil, U.S. crude production hit a record 12 million barrels a day and is expected to grow more into 2020, based on data from the Energy Information Administration.
An abundance of supply from shale wasn’t only to blame for OPEC’s withering exports to the U.S. Venezuela, the country with the world’s largest crude oil reserves, has been struggling to maintain its production which has reached the lowest levels since 1940s due in a large part to chronic mismanagement of its oil industry.