Energy Musings - April 27, 2026
The media has seized on the record U.S. oil exports and worries that we cannot increase our output to help nations suffering from shortages. They do not mention our imports or our lack of ships.
U.S.: A Super Oil Exporter; But With A Crucial Vulnerability
The Trump administration talks about U.S. energy dominance and its importance to national security and the health of the economy. Analysts point out weekly oil export records as proof of this dominance. Record U.S. oil exports are helping nations worldwide cope with supply losses from the closure of the Strait of Hormuz.
However, analysts question whether the U.S. can increase its shipments and further its dominance. The discussion began last Friday on CNBC segments. The energy reporter was quoting figures about the amount of oil being exported and the number of supertankers heading to the Gulf Coast to load cargoes for delivery to multiple foreign nations.
A report in Saturday’s Wall Street Journal quoted many of these statistics, leading us to believe the article had been posted on the newspaper’s website on Friday and was the source of the CNBC reporter’s information. A prominent chart from the maritime shipping company Kpler showed monthly volumes of U.S. oil exports to Asian nations and to the rest of the world. The chart includes recent data through April 24.
Without access to Kpler’s data, one must rely on the monthly data from the U.S. Energy Information Administration (EIA). Its data lists the volumes exported to each nation. Unfortunately, the data is reported with a two-month lag. Therefore, analysts must turn to weekly export data, but that data does not designate the destination.
U.S. oil exports to Asia have soared recently.
The WSJ article also cited data on the importance of U.S. liquefied natural gas (LNG) exports to Europe, especially now, given the 20% loss of global supply due to the Hormuz closure. While the chart shows European import data through early 2026, it likely doesn’t capture the impact of Asia’s aggressive bidding for LNG cargoes traveling to Europe since the start of the Iran war. There are many reports of LNG cargoes being rerouted from European ports to Asian nations, as they are willing to pay higher prices for the gas.
Europe is highly dependent on U.S. natural gas.
Once again, we can access monthly LNG shipment data by destination from the EIA, but with a two-month lag. It shows how export volumes began shifting toward Europe after the 2022 Russian invasion of Ukraine. (We haven’t provided a chart.) To demonstrate how dynamic the global LNG market has become, we noted that the first LNG cargo departing from the Golden Pass terminal in Sabine Pass was reportedly bound for Italy. However, other media reports suggest the cargo is heading to Belgium instead.
Golden Pass is a joint venture of ExxonMobil and QatarEnergy. They are also partners in Qatar’s LNG operations that were attacked by Iran and are currently shut down. QatarEnergy’s CEO has said the repairs to the liquefaction plant and terminal facilities will require five years to complete. Therefore, the company has instituted force majeure provisions in its long-term contracts for 17% of its output. This may explain the uncertainty about the cargo’s destination, since the Italian destination was reportedly intended to replace LNG that was originally intended for that destination under the terms of QatarEnergy’s contracts.
Much is being made of the record weekly oil exports. What we can’t discern from the data is how much is exported via pipelines to Canada and Mexico, and how much goes via water. We will show you that data below, but first, we thought it would be important for readers to understand that while we are exporting record volumes of crude oil and refined products, we also import substantial petroleum volumes.
The U.S. oil industry stepped up exports to support nations facing shortages.
Although we export large volumes of crude oil, we are a larger exporter of refined petroleum products. The chart above shows how our crude oil and refined petroleum product exports have risen since the 2021 recovery following the economic shutdown in the early days of the COVID-19 pandemic.
Few people realize how much oil the U.S. imports.
Surprising to many readers is the volume of crude oil and refined petroleum products we import each week. The U.S. is a net petroleum exporter. During the week of April 17, the latest data available from the EIA, total petroleum exports were 12,881 thousand barrels per day (kb/d), while imports were 7,778 kb/d, resulting in a net export of 5,103 kb/d.
People are probably surprised by those numbers. They result from the configuration of our refineries. They are designed to use a significant volume of heavy and medium crude oils, in contrast to the light and ultra-light crude oil produced from shale oil wells.
California’s energy market highlights another problem for the industry, the state’s economy, and the federal government. California’s domestic oil production has been in decline since the early 1980s. In 1982, California supplied 61.4% of its oil needs, with Alaska providing an additional 33%. That meant the state only needed to import 5.6% of its crude oil from foreign sources. Last year, the figures were completely reversed: imports accounted for 61.1% of crude oil, domestic output for only 22.9%, and Alaska for 16.0%. Substantially more crude oil is arriving in California on ships.
California’s oil market is becoming increasingly stressed.
California continues to fight the Trump administration’s ruling allowing the restarting of production from the platforms in the Channel Islands, adding 50,000 barrels per day to domestic output. They argue that the historical Santa Barbara oil spill from a well blowout in 1969 and the more recent oil pipeline rupture in 2015 are reasons the Sable Offshore operation should be shut down.
On the other hand, the state faces a growing shortage of refining capacity, which is putting pressure on gasoline and diesel prices. Late last year, Phillips 66 shut down its Los Angeles refinery that processed 140,000 barrels per day. In April, Valero is scheduled to shut down its Benicia refinery, which has a capacity of 145,000 barrels per day. Combined, the two closures eliminate nearly 300,000 barrels per day of refining capacity, or nearly 20% of the state’s total.
California operates as a petroleum island. It requires a special blend of fuel produced by only a few refineries. The state’s petroleum industry is not connected to the Gulf Coast or Midwest refining complexes by pipelines. As a result, the state must increase its imports of refined products by ship, adding emissions that pipeline connections would avoid. Because imports are the only option available to California other than Jones Act-compliant tankers, which are not available, the Hormuz closure is creating a serious economic challenge for the state. Asian countries, which are highly dependent on Persian Gulf oil and refined products, are halting exports of these products. This is putting pressure on California to find alternative supplies.
Reports are that the state has only a 10-day supply of gasoline. Jet fuel and diesel supplies are also low. These supply shortages pose a threat not only to Californians but also to our 50 military installations in the West, which depend on California’s refineries for fuel. This is why President Donald Trump suspended the Jones Act to allow foreign-owned tankers to move supplies between American ports. Phillips 66 has announced contracting foreign tankers to transport refined products from its Gulf Coast refineries to its dealer network in California. The Jones Act waiver has been extended for another 90 days.
The media was also hyping the Kpler data showing that an armada of supertankers is heading to the U.S. to fill up on crude oil for foreign customers. President Trump has also hinted at this phenomenon. The estimate is that there are between 60 and 70 tankers on the way. The chart in the WSJ article notes that Kpler says these are Very Large Crude Carriers (VLCCs). That means they have a carrying capacity of 2 million barrels of oil, or 120 to 140 million barrels of cargo total.
The armada of VLCCs heading to the U.S.
If we exclude the crude oil exported to Canada and Mexico, totaling about 725,000 barrels per day, then the net crude oil exported by ship is roughly 4 million barrels per day in the latest weekly data. The U.S. export data shows that we only export crude oil to Canada, and refined petroleum products to both Canada and Mexico.
For purposes of this exercise, we assume export loading volumes are not restricted. Thus, the industry could fill 2 VLCCs per day. If we average the armada estimates, we get 65 VLCCs. It would take approximately 1 month to load all the VLCCs bound for the U.S. If the U.S. could increase its oil exports by 1 million barrels per day, we could load an additional 15 VLCCs per month, bringing the total to 80 per month.
A typical VLCC travels at 14-15 knots fully loaded. When it is empty (traveling only with ballast), it presumably could travel faster. However, at 15 knots, which equates to 360 nautical miles (NM) per day, a VLCC could travel between Houston and Rotterdam (the Netherlands) in approximately 12 days. If we account for loading and unloading time, a VLCC traveling between the Gulf Coast and Europe could make a round trip in just under a month.
On the other hand, the travel time from Houston to Tokyo is approximately 18.5 days at 15 knots. That means, with loading and unloading, a VLCC could make a round-trip in 38-40 days. This is very generous, as the time is calculated by the distance between the ports and crossing the Atlantic Ocean, and through the Suez Canal, which a VLCC can’t transit. Going around Cape Horn (South America) or the Cape of Good Hope (Africa) would add 10 or more days to the trip. Thus, a round-trip to Asia could take 2 months or slightly longer.
What this demonstrates is that a fleet of 70 VLCCs could serve as a shuttle service delivering oil cargoes to Europe monthly. Serving Asia would necessitate a fleet of 140 VLCCs. However, the global oil market is not just two markets. Many smaller markets would need ships delivering smaller cargoes.
Ignored in the discussion of U.S. crude oil exports is that we are a major exporter of refined petroleum products. In fact, we export nearly twice the volume of crude oil we export. Those cargoes are equally as important as the crude oil exports. In the earlier charts of weekly exports and imports, the key numbers are that we export approximately 750,000 barrels per day of crude oil to Canada and about 1.9 million barrels per day of refined products to Mexico. We import about 400,000 barrels of heavy oil from Mexico and 4.4 million barrels of crude oil from Canada.
To demonstrate the importance of shipping to the U.S. petroleum industry, we used annual export and import data from the EIA. This allows us to isolate the volumes from Canada and Mexico that travel by pipeline and not ship. The next two charts show the trends in total petroleum exports and imports and the volumes moved by ship for 2000-2025.
U.S. petroleum exports are growing, especially the volume moving by ship.
U.S. petroleum imports are trending lower as we supply more domestically.
Currently, the U.S.-flag fleet consists of 190 ships, of which 76 are tankers. Many of them are Jones Act-compliant and are working to move crude oil from Alaska to West Coast refineries or move refined petroleum products from Gulf Coast refineries to Florida and East Coast ports. None is a VLCC. Therefore, they are limited in the total volume of U.S. oil they can handle daily.
The closure of the Strait of Hormuz and the selective opening conducted by the Iranian government highlight a strategic vulnerability of the U.S. energy industry. We do not have ships that could sustain our oil exports and imports should nations of the world decide to boycott the U.S. oil trade.
Moreover, the U.S.-flag fleet includes only 4 bulk carriers and 18 general cargo ships. These ships are needed for handling cargoes such as ores, coal, and agricultural exports. Furthermore, the U.S. does not own a single LNG carrier, yet we have become the world’s largest exporter of natural gas.
Key industries in the U.S. economy are vulnerable to disruption, a condition that demands immediate government attention. Revitalizing the U.S. maritime industry is at the top of the Trump administration’s agenda, but that is a long-term project. More immediate action is needed to begin addressing the nation’s national security risk posed by a lack of U.S.-flagged ships.