As people stayed home and avoided nonessential travel during the pandemic, domestic (and global) demand for transportation fuels in 2020 decreased. Weekly U.S. consumption estimates for motor gasoline in particular recorded their lowest levels since January 1994. In response, U.S. refineries altered their operations to adjust to less end-use product demand, and total refinery throughput decreased in 2020.
Refineries can change their petroleum product output by changing how often and in what manner the downstream that processes the output from distillation units are run. Beginning in late March of 2020, because of responses aimed at slowing the spread of COVID-19, refinery yields for liquid fuels began to fall, as did refinery utilization. Crude oil throughput, or the amount of crude oil processed at refineries, decreased in 2020. In the Reference case, however, total refinery throughput returns to pre-COVID levels in about 2025, and utilization returns to pre-COVID levels sooner because of the permanent closures of some refining capacity.
In addition, refineries have lower capacity as a result of several closures and conversions of refineries in 2020. This factor puts further downward pressure on total crude processing, resulting in less petroleum product and more crude to be exported. The projected increase in domestic crude oil production, recovery in global liquid fuels demand, and increase in U.S. refinery inputs means the U.S. returns to net petroleum exporter status, on a volume basis, by 2024.
In the Reference case, the United States is both an importer and exporter of petroleum liquids, importing mostly heavy crude oil and exporting mostly petroleum products such as gasoline and diesel. Even though product exports in 2020 were lower than previous years, the AEO2021 Reference case projects relatively high levels of exports for petroleum and other liquids exports through 2050. These high export levels are primarily a result of less consumption of liquid fuels in the United States and, to a lesser extent, a result because of domestic production of crude oil that cannot be processed economically domestically and is more valuable when exported. Net exports of petroleum and other liquids hold steady in the Reference case and stay in a similar range for the rest of the projection period.
The side cases illustrate the variable nature of U.S. petroleum trade. In the High Oil and Gas Supply side case, more resources and more availability result in increased domestic production and net exports. The High Oil Price case shows similar results: high production levels and accompanying exports. Whether it be higher supply or higher price, the effect is the same—the United States remains a net exporter during the entire projection period for those two cases. The opposite occurs in the Low Oil and Gas Supply case and Low Oil Price case. Generally, as a result of many possible oil price paths, production and throughput remain significantly uncertain.
In AEO2021’s Reference Case, the United States remains a net exporter of petroleum and other liquids, but the balance of imports to exports is highly sensitive to supply, demand, and price factors.