Issue 132 – Damen Double Hull Oil Tanker
Introduction…Sharp drops in U.S. imports of crude oil destroyed the biggest market for OPEC producers. Now, the surging U.S. oil exports banned just two years ago by Washington challenges the last region OPEC dominates…Asia.
U.S. oil shipments...U.S. oil shipments to China had a massive increase and in turn, have been helping Washington with reducing the nation’s huge deficit with China.
This seismic shift is reflected in the recent figures that show the U.S. now produces more oil than Saudi Arabia and will likely outproduce the no. 1 spot Russia holds by the end of the year.
Data in Thomson Reuters Eikon shows U.S. crude shipments to China went from nothing before 2016 to a record 400,000 barrels per day (bpd) in January, worth almost $1 billion. Additionally, half a million tonnes of U.S. liquefied natural gas (LNG) worth almost $300 million, headed to China from the U.S. in January.
And then there is plastic…In 2007 ExxonMobil expected the U.S. plastic industry to vanish due to the high cost of production. Enter the Frackers who fill our pipelines with natural gas. Now the Port of Hoston is undergoing significant upgrades to handle the wave of plastic resins that will add half a million tons annually in export volume. Most of that volume is headed to China.
Conclusion…The frackers may have saved much of America’s manufacturing. And as we see here today, the low cost of natural gas and other petroleum products once again makes America an attractive export manufacturing location.
Sources: Peter Tirschwell, “More vessel capacity key to Houston’s resin export dominance,” JOC.com, 20 May 2017; Henning Gloystein, “How souring U.S. exports to China are transforming the global oil game,” Reuters, 9 Feb 2018.