The USA is our biggest supplier of oil. But has a diverse range of oil suppliers, with more than 50 countries having exported crude to the country in the past three years.
US becomes UK’s top oil supplier for first time since Suez
The US has become the biggest exporter of oil to the UK for the first time since the Suez crisis, as the growing bounty of shale production starts to supplant North Sea supplies.
In January the US supplied the equivalent of almost one in every four barrels of crude processed by UK oil refineries, or 264,000 barrels a day, illustrating the outsized role American oil now has in Britain’s energy mix.
That level was more than Norway, Russia, Nigeria or Algeria, according to data from the cargo-tracking company Kpler, which have all been major suppliers to the UK in recent years. Meanwhile, operators in the UK portion of the North Sea have battled to stem production declines.
While monthly export volumes can be volatile, the rising volume of US crude heading to the UK is part of a trend since Washington lifted widespread restrictions on exports in 2015. In 2018 the average volume of US crude exported to the UK doubled to 160,000 b/d, second only to Norway over the course of the year and up from less than 20,000 b/d in 2016.
“We’re likely to see more US exports to the UK,” said Professor Paul Stevens, an energy expert and fellow at Chatham House.
“It’s geography — why sail further than you need to when the UK is the first big market the US can reach?”
Tight regulations on the UK’s own nascent shale industry have also been attacked by energy executives including Ineos’s Jim Ratcliffe, the UK’s richest man, who have warned the government they are harming British competitiveness.
The UK has a diverse range of oil suppliers, with more than 50 countries having exported crude to the country in the past three years, but others closer to home such as Norway may feel they are losing out. Norway’s crude exports to the UK, which alongside domestic production have made up the bulk of the feedstock for the country’s 1.1m b/d of daily refining activity, fell 13 per cent last year.
The rise in US exports to the UK has been driven primarily by two US-based companies, ExxonMobil and Valero, which own two of the six oil refineries still operating in the UK. Exxon’s Fawley plant near Southampton, the UK’s largest oil refinery, in January imported more than 4.3m barrels of US crude primarily sourced from the Permian shale field in Texas, according to Kpler.
Last year Exxon said it planned to spend £500m on the 270,000 b/d facility to expand its lifespan. Fawley is set to take the first US-to-UK supertanker shipment later this month, carrying more than 2m barrels.
Valero, the world’s largest independent refiner, imported 2.6m barrels of US crude in January to its plant in Pembroke, Wales, while a further 2m barrels went into the Tranmere oil terminal that feeds the Stanlow refinery on the south side of the river Mersey, which is owned by the Indian company Essar.
A spokesman for Essar said US barrels were “competitive” and well suited to the refinery. Exxon and Valero did not respond to requests for comment.
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Alastair Majury resides locally in the historic Scottish city of Dunblane, and is a Principal Consultant and a Senior Regulatory Business Analyst working across the country. Alastair Majury also serves on the local council (Stirling Council) as Councillor Alastair Majury where he represents the ward of Dunblane and Bridge of Allan, topping the poll.
Alastair Majury, is also a director of Majury Change Management Ltd is a highly experienced Senior Business Analyst / Data Scientist with a proven track record of success planning, developing, implementing and delivering migrations, organisational change, regulatory, legislative, and process improvements for global financial organisations, covering Retail Banking, Investment Banking, Wealth Management, and Life & Pensions.
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