The United States maintains seaborne oil supplies to the European Union at low prices

By Marek Grzybowski

Tankers loading crude oil in US terminals will have a lot of work in 2025. US exports remained stable in 2024 at 4.1 million barrels per day in January-December 2024. This provided US oil suppliers with a 9.3% share of world trade. Exports from the Persian Gulf remained at 17.5 million barrels per day in 2024. This accounted for 40% of global supply in oil trade. Exports from Russian ports (including oil of Kazakh origin) decreased by 0.8% y/y to 4.6 million barrels per day, which accounted for 10.4% of world trade.

Exports from South America increased by 10.9% y/y to 3.8 million barrels per day and reached 8.8% of world trade. Exports from West Africa fell 1.9% year-on-year to 3.4 million barrels per day (7.7% of the global market). Exports from ASEAN rose 4.8% year-on-year to 2.5 million barrels per day in January-December 2024. Banchero Costa Research says this volume “inevitably includes re-exports of Russian-origin crude oil.” After a strong 2023, when global oil supply rose 5% year-on-year, markets stabilized in 2024. Global oil cargoes did not change dramatically in January-December 2024. Supply rose only 0.2% year-on-year, excluding all cabotage trade, according to data from Refinitiv (LSE) tracking oil tanker traffic.

Oil exports are falling
In the first 4 months of 2025, global exports fell by 2% compared to the same period (January-April) in 2024, almost 1 million barrels per day less. Oil supply from Arab countries fell by 1.4% to 17.6 million barrels per day. Exports from Russia decreased by 5.8%. An interesting phenomenon was observed.

In the first 4 months of 2025, South America exported more oil than the US. Exports from this region increased by 5.2%, while exports from the US fell by 9.1%. Exports from West Africa did not change, while the dynamics of supply from North Africa was higher than exports from ASEAN countries thanks to an increase of +3.3%. Production from ASEAN countries fell by as much as 20.4%. This is most likely the effect of a decrease in the supply of oil delivered by ships from wells from the Russian market.

Prices were stable for a long time. Oil prices rose more than 1% Wednesday on supply concerns as OPEC+ agreed not to change its production policy, reports Nicole Jao, a Washington-based reporter for Ruters. Investors had previously expected OPEC+ members to agree to increase production later this week. OPEC+, the Organization of the Petroleum Exporting Countries, and allies did not change their production policy. They agreed to establish a mechanism to set baseline levels of oil production in 2027.

“Most oil-producing countries at the meeting do not have the ability to adjust their production,” Jao told Bob Yawger, director of energy futures at Mizuho. “They were hoping to slow the pace of production growth and stop the price decline. But that did not happen,” he added.

A separate meeting of the eight OPEC+ countries is expected to take place on Saturday to decide whether to increase oil production in July. Analysts at Goldman Sachs believe the group of eight countries will keep production steady after the July increase. “However, we see risks to our OPEC8+ supply path tilted to the upside, particularly if compliance does not improve or if hard demand data surprises further to the upside,” Reuters reported.

Summer demand will be rise?
Oil demand is expected to be strong in the summer, and with stable non-OPEC+ oil production in the first half of the year, coupled with the risk of wildfires in Canada hurting supply, demand for OPEC+ oil will rise, predicts Janiv Shah, vice president of commodity research at Rystad Energy, Reuters reports. U.S. crude inventories fell by 4.24 million barrels last week, according to the American Petroleum Institute, which was released on Wednesday.

Oil analysts also said prices could fall if there is progress in global trade talks or a resolution of tensions between the U.S. and Iran. Iran’s nuclear chief Mohammad Eslami said on Wednesday he could allow the U.N. nuclear watchdog to send U.S. inspectors to visit nuclear facilities if Tehran’s talks with Washington are successful. The oil market in the European Union will therefore be affected by the decisions of OPEC+ countries, the level of inventories in the US and the political relations between Tehran and Washington. In 2024, US exports to the EU fell significantly, by 25.6% to 1.2 million barrels per day. The EU remains, by far, the largest importer of US crude oil with a share of 31.2%. Seaborne crude oil imports to the EU fell by 8.1% in the first 4 months of the year to 9.1 million barrels per day, a net loss of 800 thousand barrels per day compared to the same period in 2024.

EU sees sharply lower US oil imports
The EU saw lower volumes from all of its major exporters, with the exception of South America, which now accounts for around 10% of EU imports. The second largest importer of US crude oil was ASEAN, with volumes falling to 420,000 bpd, down 3.8% year-on-year. The third largest importer of US crude oil, with a share of 10.7%, was South Korea, with exports to the country down 5.8%. The fourth largest importer of US crude oil exports, with a share of 8.7%, was Northwest Europe, which saw demand fall by 16.0%. India came in fifth with a share of 7.5%. US crude oil exports to India rose 40% to 290,000 bpd.
In terms of terminals that export U.S. crude to international markets, Corpus Christi accounts for 63% of total exports. Next are the Houston oil ports at 13% and Galveston at 7%. Louisiana’s LOOP, the other major VLCC port, accounts for just 3% of total U.S. crude exports. U.S. crude was mostly exported by VLCC tankers, which accounted for 51% of total exports, followed by Suezmax at 24% and Aframax at 22%.

U.S. oil production is expected to be higher in 2025 than previously expected, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook in January. The EIA expects U.S. oil production to average 13.59 million barrels per day (bpd) in 2025, up from a previous estimate of 13.55 million bpd. The data takes into account U.S. President Donald Trump’s pledge to maximize U.S. oil production. Trump has stood by his decision, even as energy executives have said maintaining capital discipline is a priority.

The EIA also projects Brent prices to average about $74 a barrel in 2025 and fall to about $66 in 2026. The oil surplus effect will be at work, as the agency projects gradual production growth coupled with relatively weak growth in global demand. The EIA said OPEC+ production cuts would reduce global oil stockpiles and keep oil prices at current levels in 2025.
Global liquid fuels production is set to rise by 1.7 million barrels per day in 2025, with about 100,000 barrels per day coming from OPEC+ producers. The group will increase production by 600,000 barrels per day in 2026. The group will end its voluntary production cuts. However, caps on the growth of global oil stockpiles will remain in place, the EIA said in a report.

“Production growth outside OPEC+ will be driven by the U.S., Canada, Brazil and Guyana through 2026,” Reuters reported in Houston. Global liquid fuel consumption will increase by 1.4 million barrels per day in 2025 and 1 million barrels per day in 2026, led by India and China, the EIA said. The projected growth in global oil supply will continue to be slower than the pre-pandemic trend, the EIA said.

So far, any future tariffs imposed by Trump on Canada and Mexico are not expected to have a significant impact on global oil supplies, the EIA said. U.S. refinery activity will remain relatively high. Despite the increased production, the EIA forecasts that net fuel exports from the U.S. will decline to meet domestic fuel demand due to the closure of two U.S. refineries.