Overseas Buyers in Hot Pursuit of U.S. Crude Oil

Overseas refiners have increased purchases of U.S. crude oil due to supply concerns in the Middle East and Black Sea. Attacks on Saudi oil tankers and disruptions in Kazakhstan have led to a surge in demand for U.S. crude, with Asian and European refiners seeking similar oil grades. As a result, Gulf Coast WTI has reached a roughly $5 premium over Brent, with U.S. inventories shrinking and underscoring America’s role as a key supplier. New export deals could boost U.S. crude shipments, but analysts note that Kazakhstan’s disruptions may be temporary and demand could ease. The increased demand has led to a rise in pump prices for consumers and may aggravate inflation in the run-up to midterm elections. U.S. crude oil exports surged to a record 5.66 million barrels a day in May, and while shipments have eased recently, they may yet rise again as new deals are struck. The production curbs in Kazakhstan have made WTI more competitive in the Mediterranean and Northwest Europe, but the disruption is likely temporary. The uptick in demand comes amid dwindling U.S. crude inventories, with commercial oil stockpiles near an eight-year low and the nation’s emergency reserve at a level not seen since 1983.