May 3 (UPI) — Oil exports from the United States have increased by more than 30% the U.S.-Israeli war in Iran started and the Strait of Hormuz was blockaded in response.
The Port of Corpus Christie has overtaken the ports in Saudi Arabia and Iraq in the last few weeks as the two Persian Gulf ports have been cut off from the rest of the world since the Strait has been blockaded.
Over the past two months, the United States has sold more than 250 million barrels of oil to foreign buyers as exports have increased by 30%, from 3.9 million barrels per day in February to 5.2 million barrels per day in April, Bloomberg and CNBC reported.
Experts have warned, however, that domestic oil inventories are depleting stockpiles and there is a question of how long the country will be able to continue replacing oil on the market that is stuck in the Strait.
Although selling oil is good for business, oil producers are struggling to keep up with the demand and it is possible that selling so much could have an add-on effect of pushing gas prices for American consumers even higher than they have gone since the war started.
“Ships are coming to take our oil, but once significant volumes of are leaving the United States, it can be expected that balances will tighten,” Clayton Seigle, senior fellow at the Center for Strategic and International Studies, told Bloomberg.
“We are digging ourselves a hole in terms of spending down inventories,” he said.
Roughly 20% of global oil supplies pass through the Strait of Hormuz and Iran’s shutting of it has caused gas and fuel prices to skyrocket over the last two months, including massive effects on the airline industry, which has seen seen the price of jet fuel double since before the war.
Oil from the United States, Latin America and West Africa could for a short time be a substitute for Middle Eastern oil for countries in Asia, which has been hurt the most, but it is not ideal, Matt Smith, director of commodity research at Kpler, told CNBC.
“Asian markets are buying whatever they can get their hands on, so they’re taking a lot of light sweet [American] crude [oil],” Smith said, but their refineries are optimized for the heavier oil produced in the Middle East.
“It’a hole that can’t be plugged,” Smith told CNBC. “The answer has to be ensuring secure supply from the Middle East.”
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