US oil exports thrive amid sanctions on Russian and Venezuelan crude
The main beneficiaries of the sanctions imposed on Russian and Venezuelan oil have become American suppliers, gaining markets previously dominated by OPEC+ countries. Since the Russian invasion of Ukraine in 2022, US oil exports have reached five new monthly records.
As reported by Bloomberg, American crude oil is displacing Russian and Venezuelan crude in key export markets, benefiting from sanctions imposed on major rivals. Since the start of the war in Ukraine in February 2022 and the imposition of an embargo on Russian oil by the West, US crude shipments abroad have set new monthly records five times. Moreover, with the extension of sanctions on Venezuela approaching in April, traders of American oil are beginning to replace Venezuelan crude in India, one of the largest oil importers under restrictions.
American crude oil gains from sanctions
While American crude oil has long been popular in the global market, the turmoil in global crude flows after the Russian invasion of Ukraine created additional demand for barrels from across the ocean. As a result, shipments to Europe and Asia sharply increased, making the USA one of the world's largest oil exporters, according to Bloomberg.
Record US oil production, coinciding with production cuts by OPEC and allies, also helped American producers strengthen their position in foreign markets. Oil prices reflect this, with the American benchmark WTI in Houston trading close to the highest levels since October.
India reduces imports from Russia in favour of the USA
India, the third-largest oil importer in the world and the second-largest buyer of Russian oil after China is another market where the share of supplies from the USA is increasing. According to data from Kpler, which monitors tanker movements, imports of American oil into India are expected to reach the highest level in March of nearly a year.
At the same time, Russian oil imports into India fell by about 800,000 barrels per day compared with last year's peak, as Bloomberg data shows. Deliveries from Russia may drop even further after Indian refineries stopped accepting cargoes from tankers belonging to the recently US-sanctioned Russian shipping company Sovcomflot.
USA key supplier of oil to Asia and Europe
Even before the latest sanctions took effect, the USA rapidly became a key source of oil supplies to Asia. As reported by the US Energy Information Administration (EIA), imports of American oil to this region reached a record level last year.
In Europe, which has largely resigned from Russian oil since the outbreak of the war, imports from the USA are expected to reach a record 2.2 million barrels per day in March, according to Bloomberg calculations. The increase in demand for American oil in Europe is not solely due to sanctions - imports to the Netherlands jumped after WTI crude was included in the Dated Brent benchmark last year. Nevertheless, the embargo on Russian crude has increased the demand for alternative supply sources. Imports from the USA to France rose by almost 40 percent between 2021 and 2023 and to Spain by 134 percent. The United States definitely has the opportunity to achieve even greater gains.
