Asia remains the biggest consumer of oil in the world, and the U.S. has taken advantage of that, although certain challenges await them such as finding a solution to Asian refineries that process heavier crude blends.
Exporters should also consider the quality of an above-ground storage tank for crude oil shipments since they would likely have to be reconfigured for Asian refineries.
U.S. exports to Asia will comprise around 1.3 million barrels per day (BPD) in June, according to industry figures. China will be the biggest oil export destination in the continent with 8.4 million BPD of annual gross imports in 2017, based on the U.S. Energy Information Administration’s (EIA) report.
Other markets consist of Japan, India and South Korea. While reconfiguring refineries to suit the processing capabilities in Asia may be easier, U.S. exports would still need to figure out how to deal with the lack of pipeline infrastructure in the country.
An efficient logistics network remains important, whether the U.S. imports or exports oil.
Crude oil imports are just as important as exports, despite some claims that keeping oil in the country and withdrawing from the export market would likely reduce prices. A simple explanation for this involves the need for oil refinement into another commodity since almost nobody consumes it directly.
It’s also impractical to store oil in the country, especially during periods of high production. The glut in supply causes energy companies to look for other viable export markets, instead of letting the product go to waste.
The rewards of exporting to the Asian market can be rewarding for U.S. energy companies, but it won’t be an easy venture for some exporters. Some energy firms would need to invest in new storage solutions to make sure their product is compatible with Asian refineries.