Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
The VLCC market has been realising significant gains driven by
the increasing loading activity in the US Gulf. However, the
country's only deep-water oil export facility, Louisiana Offshore
Oil Port (LOOP), hasn't managed to reach its potential, with only
limited VLCC loadings to observe so far. Its location together with
the domestic demand for sour crude have kept VLCC loadings at LOOP
at rather low levels, even as the country's total shipments rise
further.
Being the only terminal across the US Gulf that could
accommodate fully laden VLCCs, LOOP has only recorded four loadings
on VLCCs so far in 2019, heading to South Korea, Taiwan and Japan.
Meanwhile, US crude shipments flirt with record high levels in
parallel to the country's continued expanding production.
According to the Energy Information Administration (EIA), US
crude exports reached a new high in February, surpassing 3.6
million barrels per day. Data provided by Commodities at Sea suggest a
similar trend, with shipments pushed up further since late 2018.
Most VLCC shipments load within the US Gulf Lightering Zones or at
terminals across Texas, such as Galveston and Corpus Christi. This
trend is expected to continue throughout this year, due to the
location of export availability. Being in the eastern point of
Louisiana, far away from the incremental crude exports from the
Permian Basin in West Texas, the connection to LOOP cannot be an
easy task.
LOOP mainly exports grades such as Mars, Poseidon and Thunder
Horse, all types of medium-sour crude typically preferred by
domestic refineries, especially after the sharp decline in flows
from Venezuela and Saudi Arabia.
Saudi Arabia has been proceeding with production cuts, with a
significant impact on shipments to the US, dropping below half a
million bpd in January, but recovering last month. But we have seen
no loadings from Venezuela after Washington imposed sanctions on
state-owned oil and gas company Petroleos de Venezuela SA.
As domestic refiners are now expected to absorb most of the
area's production, the LOOP terminal will most probably not ramp up
exports during this year. LOOP, a joint venture between Shell,
Valero and Marathon Petroleum, has been exporting since February
2018 after modifying its facilities to operate bi-directionally.
Arrivals at LOOP remain quite strong, with the majority coming from
the Middle East.
