U.S. Oil Exports Hit Eight-Month Low in July, With Analysts Pointing to Early Signs of Recovery

U.S. crude exports fell to 3.66 million barrels per day (bpd) in July — the lowest level in eight months — as June's short-lived U.S.-Iran ceasefire briefly increased Middle Eastern supply in global markets, weighing on demand for U.S. crude exports, ship-tracking data showed.

The decline from May's record:

→ Exports peaked at 5.7 million bpd in May, when the U.S. became the world's largest crude exporter amid disruptions linked to the Iran conflict.

→ Asia's share of U.S. exports fell to ~40% in July from 52% in June.

→ Japan (top buyer): shipments down 67% to 324,000 bpd from May's peak.

→ South Korea: down 39% to 474,000 bpd.

→ Europe: fell to ~1.7 million bpd from 2.5 million bpd in May.

Domestic factors also pulled barrels off the export market: U.S. refinery utilization hit 96.3% — the highest since 2018, according to EIA data — keeping more crude available for domestic processing.

Factors Supporting a Potential Recovery in Exports: WTI's discount to Brent widened to as much as $5.42 per barrel in July, from $4.17 in June, improving the price competitiveness of U.S. crude in overseas markets. Scott Shelton of TP ICAP also noted unusually heavy Gulf Coast ship-fixture activity, including large-tanker bookings to Asia and Europe.

Forward forecasts:

→ Vortexa: exports to exceed 4 million bpd in August-September (below April-May's 5M+ peak).

→ Energy Aspects: 4.58 million bpd in August, 4.45 million bpd in September.

Market focus: Market participants continue to monitor the WTI-Brent spread, which analysts view as an important indicator of U.S. crude export competitiveness. Ben Cook of the Hennessy Energy Transition Fund said any renewed escalation in the Middle East could increase demand for U.S. export capacity, depending on market conditions.

Sources: Reuters, Kpler, U.S. Energy Information Administration, Vortexa, TP ICAP, Energy Aspects