U.S. exports of petroleum products reached their highest average in first-half 2022 as Russia’s invasion of Ukraine shifts trading patterns

In the first half of 2022, U.S. exports of petroleum products averaged nearly 6.0 million barrels per day (b/d), the highest first-half-of-year exports in Petroleum Supply Monthly data since 1981 (Figure 1). Nearly all petroleum products contributed to more exports, with the largest increases coming from distillate fuel oil and hydrocarbon gas liquids (HGLs). Changes in Europe’s supply sources contributed to shifts in trade patterns for some, but not all, U.S. exports. In our September 2022 Short-Term Energy Outlook (STEO), we forecast petroleum product net exports (gross exports minus gross imports) will remain above the five-year (2017–21) average through the end of 2023, suggesting gross exports will remain higher than previous years.

U.S. petroleum product exports increased in the first half of 2022 by 11% (596,000 b/d) compared with the same period last year—the fastest growth rate for that time period since 2017. Most of the growth was distillate fuel oil, exports of which increased by 19% (190,000 b/d), and HGL exports, which increased by 5% (114,000 b/d). High demand and low inventories globally, magnified by economic sanctions against Russia’s petroleum exports and self-sanctioning by some firms following Russia’s full-scale invasion of Ukraine in February, have disrupted global distillate trade. Despite the increase from 2021, U.S. distillate exports of 1.18 million b/d in the first half of 2022 remained 2% below the five-year average. U.S. motor gasoline exports increased by 11% (89,000 b/d) to reach a new record of 910,000 b/d for the first six months of the year. Exports in June of 970,000 b/d continued the trend from last year of new monthly record gasoline exports in the summer. U.S. jet fuel exports increased by 104% (87,000 b/d) to reach 171,000 b/d. Jet fuel exports remain 11% below their pre-pandemic five-year (2015–19) average. Only U.S. residual fuel oil exports declined compared with last year, falling slightly to 113,000 b/d.

U.S. distillate fuel oil exports to Latin America increased to over 1 million b/d in the first half of 2022 while exports to Europe decreased to 71,000 b/d over the same period (Figure 2). Latin America accounted for 91% of U.S. distillate exports during this period, with Mexico, Chile, and Brazil receiving the largest volumes. Europe accounted for 6% of U.S. distillate exports during the first half of the year, the smallest share for this period since 2003. In Europe, responses related to Russia’s full-scale invasion of Ukraine have caused changes in trading patterns for other fuel sources; however, so far, that has not happened for distillate fuel oil. For example, U.S. crude oil exports to Europe averaged a record of 1.67 million b/d in May as refiners in Europe moved business away from Russia and started drawing on alternative sources. Similarly, U.S. liquefied natural gas (LNG) exports to Europe increased substantially this year as new sources replaced declining natural gas supplies from Russia. Yet, as of June, Europe’s imports of distillate from Russia show little change from 2021. European sanctions adopted in June 2022 that prohibit imports of crude oil and certain petroleum products from Russia, including distillate fuel oil, will take effect in December for crude oil and in February 2023 for petroleum products.

U.S. propane exports averaged 1.39 million b/d in the first half of 2022, a 6% increase (78,000 b/d) from the first half of 2021 (Figure 3). Propane was the most-exported U.S. petroleum product in the first half of this year, continuing a trend started in 2020. U.S. exports to Asia have grown rapidly in recent years as consumption of propane as a petrochemical feedstock and consumer demand has increased. This stronger inclination toward Asian markets distinguishes propane from other major U.S. refined product exports, such as distillate and gasoline, which mostly flow to destinations in the Americas. About 51% of U.S. propane exports went to Asia, mostly to Japan, China, and South Korea. However, exports to Asia declined for the first time since 2018, by 3% (22,000 b/d). In contrast, most of the growth in propane exports went to Europe, increasing by 51% (87,000 b/d) to average 259,000 b/d and reaching an all-time high in June of 349,000 b/d. Similar to crude oil, following Russia’s full-scale invasion of Ukraine, Europe increased propane imports from the United States. High naphtha prices have also made propane more competitive for flexible feedstock crackers in Europe.

Although the STEO does not forecast gross U.S. petroleum product exports, our forecast of net petroleum product exports from the September 2022 STEO suggests that gross petroleum product exports will remain higher than previous years through 2023. In the first half of 2022, net exports of U.S. petroleum products averaged 3.87 million b/d, or 24% (740,000 b/d) more than on average during the previous five years (Figure 4). Most of the increase in this period came from HGLs, which were 38% (610,000 b/d) more than their 2017–21 average. In 2023, we forecast net exports of petroleum products will average 3.91 million b/d, a 1% decline from 2022 but still 21% above the 2017–21 average. We forecast HGL net exports will average 2.57 million b/d in 2023, a 10% (240,000 thousand b/d) increase compared with 2022 levels and 55% above the 2017–21 average.

For questions about This Week in Petroleum, contact the Petroleum and Liquid Fuels Markets Team at 202-586-5840.