US crude oil exports eased in July to the lowest levels in nearly four years as low domestic supplies boosted prices for West Texas Intermediate crude futures (WTI) relative to the global benchmark Brent and hurt demand abroad.
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 US Energy Information Administration.
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 President Donald Trump's administration recently has pushed countries to commit to more US oil purchases as part of trade negotiations.
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 US oil.
Exports of US 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 US crude in 2024, nearly halved in July, and those to India fell 46 per cent.
Meanwhile, exports to Europe fell 14 per cent to 1.6 million bpd from June.
"Asia had better alternatives from a landed cost perspective," said Jeremy Irwin, global crude lead at Energy Aspects.
Low inventories of oil at the key storage hub in Cushing, Oklahoma, due to increased refining activity during the peak summer driving season and strong exports in previous months, kept more domestic barrels in the US, traders and analysts said.
Prices for WTI Midland at Cushing were about 40 cents higher than prices for it at the coast, Irwin said.
Exports to Asia of US crude are however expected to step up in the fourth quarter as Middle East oil prices strengthened, making it more economic to ship oil to Asia from the US, trade sources said last week.
Energy Aspects forecast about a 400,000-bpd increase to August from July in US Gulf Coast exports.
While Washington's push for countries to commit to energy purchases as part of trade deals may help inch exports higher in the short term, traders and analysts remained skeptical of any longer-term boost to exports from the agreements.
South Korea said it would purchase $100 billion worth of liquefied natural gas or other energy products, while the European Union pledged to buy $250 billion of US energy supplies per year. Pakistan is set to import its first-ever cargo of US crude in October, while India's biggest refiner Indian Oil Corp bought 4.5 million barrels of US crude this week as Trump threatens tariff hikes on the country for its purchases of Russian oil.
These purchases would likely only push up US exports for two or three months, Irwin said, as refinery buyers have to act in their best interest from an input cost perspective. Further, rising OPEC+ supplies especially into the end of the year are set to increase options for European and Asian refiners, and could weigh on export demand for light sweet US crude.
The group agreed on Sunday to raise oil production by 547,000 bpd for September, marking a full and early reversal of its largest tranche of output cuts.
(Reporting by Arathy Somasekhar in Houston; editing by Stephanie Kelly and Marguerita Choy)