Europe’s thirst for U.S. crude to stay high in 2023
Europe’s thirst for U.S. crude oil is expected to remain elevated, VP of Midstream for Chevron Corp said today on the sidelines of the Argus Americas Crude summit.
“A key change in flow is U.S. crude going to Europe. For this year, I’m pretty confident Europe is short of Russian oil, and we’ll see more U.S. crude there,” Colin Parfitt told Reuters.
After a fairly steady rise from April 2021 onward, U.S. crude oil exports to Europe hit 1.69 million bpd in December, according to Kpler data cited by Reuters. It is the highest level in two years. Overall in 2022, U.S. crude oil shipments to Europe were 70% higher than in 2021, CME Group said earlier this month.
For February, U.S. crude exports to Europe eased up to 1.42 million bpd.
The flows have given more prominence to the WTI benchmark. In June, WTI will be used as one of the streams in the Dated Brent pricing mechanism, and the shifting flows brought on by Russia’s invasion of Ukraine and the resulting sanctions and price caps have helped catapult its importance in the global market.
The United States has increased its crude oil exports to Europe as the latter looks to non-Russian supply after banning seaborne imports as of December 5 last year.
Prior to the December 5 deadline, Russian crude oil satiated about 20% of Europe’s crude oil appetite. But even before that, Europe began winding down its Russian crude oil purchases as refiners began to self-sanction against Ukraine’s aggressor, with flows curbing 700,000 bpd lower than before the invasion.
Since then, Europe has looked to Saudi Arabia, Iraq, Nigeria, Norway, and the United States, to fulfill its crude oil needs.
