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(Bloomberg) — The historic boost to US crude exports triggered by Iran war disruptions to global energy supply will likely endure and has even revived interest in new pipeline infrastructure, according to the head of the largest US oil port.
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US oil exports surged this year as the near-closure of the Strait of Hormuz choked off Mideast crude and sent buyers scrambling for alternative supplies. The market tightening was a major boon to US oil companies and the ports that handle their product including the Port of Corpus Christi.
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“It’s been a nonstop parade of ships past our windows,” Port of Corpus Christi Chief Executive Officer Kent Britton said in an interview with Bloomberg News Tuesday. The port had a record first half of the year for cargoes of commodities such as oil and liquefied natural gas passing through its waterways.
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As many as 6.4 million barrels a day of oil, the highest level in US history, flowed on an fleet of ships from facilities along the coasts of Texas and Louisiana. Before the war, the US exported about 4 million barrels daily. As a tentative truce between the US and Iran collapses amid a new wave of attacks, the question remains whether the US will entrench its status as the backstop to global oil markets.
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The US could likely export a million barrels a day more than prewar levels, according to Britton. “There has to be a demand signal. There has to be a supply signal from the big E&Ps who have to say that they’re willing to go fill that need,” Britton said, referring to oil producers. Some 400,000 of those daily barrels could leave from Corpus Christi and the remainder from other ports along the US Gulf Coast such as Houston and terminals in Louisiana.
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“There’s no coincidence to why the president stood in Corpus Christi the day he made a decision to go into Iran,” Port of Corpus Christi Commission Chairman Gabe Guerra said in the interview at Bloomberg News’ Houston bureau.
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The boost to US crude exports has even revived conversations about a pipeline connecting Corpus Christi to the oil hub of Cushing, Oklahoma, which serves as the main conduit for shipping Canadian and Bakken Basin oil to fuel makers and exporters in the US. Port of Corpus Christi has been in talks this year about such a pipeline, Britton said, declining to name the companies involved. Phillips 66 and Plains All American Pipeline LP previously planned a pipeline on the route, but the project was halted amid a slow recovery in US oil output in the wake of the Covid-19 pandemic. Corpus currently only exports barrels of oil produced in Texas from the Permian and Eagle Ford basins.
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“If I were building for the future, I would get a pipeline out of Cushing,” Britton said.
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—With assistance from David Wethe.
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English (US)