U.S. refined products exports hit a record high in March as the Iran war left Europe, Asia and Africa scrambling to fill supply shortfalls created by the near-complete closure of the Strait of Hormuz.
Iran has been disrupting shipping in the strait, through which oil and fuel exports flow that represent a fifth of global consumption. The loss of these supplies has forced production cuts at plants in those regions, causing price spikes and threatening an economic slowdown.
U.S. exports of clean petroleum products, which include gasoline, naphtha, diesel and jet fuel, hit about 3.11 million barrels per day in March, up from about 2.5 million bpd in February, data from vessel-tracking service Kpler showed. That is the highest monthly level in Kpler records going back to 2017.
U.S. fuel exports to Europe rose nearly 27% month-over-month to 414,000 bpd in March, while exports to Asia more than doubled to 224,000 bpd, the Kpler data showed. Exports to Africa surged 169% to 148,000 bpd, the data showed.
“These flows are a reflection of the global supply tightness pulling barrels out of the U.S. Gulf Coast export hub,” Kpler analyst Matt Smith said.
“The longer that Strait of Hormuz disruptions go on, the greater dislocations there are on a global basis, which will force new trade routes to open up,” he said.
U.S. refiners last month shipped a record amount of fuel on routes rarely used before, such as from the U.S. Gulf Coast to Australia, and even U.S. markets that themselves are reliant on imports shipped fuel out to Europe and elsewhere.
For example, about 72,000 bpd of clean petroleum products were shipped from the U.S. East Coast to Europe last month, the second-highest in Kpler records after a peak of 84,000 bpd in September 2024. The U.S. East Coast typically imports diesel from Europe.
SURGING FUEL EXPORTS COULD POSE POLITICAL ISSUE FOR TRUMP
The rising stream of fuel leaving the country could pose a political issue for President Donald Trump as U.S. consumers have been hit with gasoline prices averaging over $4 a gallon at the pumps for the first time in three years.
Average U.S. retail prices for diesel, used mainly for freight and industrial activities, have surged to nearly $5.50 a gallon, threatening to derail the economy by raising prices for everything from food to furniture.
“Americans are already asking questions about why we can’t keep our own oil, and you may see the chorus grow,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
Energy Secretary Chris Wright has repeatedly denied rumors that the U.S. may implement restrictions on oil and gas exports. Oil groups have previously lobbied hard against any such restrictions, including after Russia’s invasion of Ukraine, arguing that export bans would decrease domestic refining and raise fuel prices.
For fuel exporters, the decision to keep fuel in the country or ship it to buyers elsewhere boils down to margins. While U.S. fuel prices have surged, they are not yet at demand-destroying levels, Kpler’s Smith said.
U.S. gasoline demand stood at 8.69 million bpd last week, up about 191,000 bpd from the same time last year, while diesel and jet fuel demand were also up year-over-year despite rising prices, government data showed on Wednesday.
As long as the Strait of Hormuz remains virtually shut, supply shortfalls elsewhere in the world will only worsen, raising margins and encouraging U.S. fuel exports further, Smith added.
Trump, who is due to make a speech on Iran later on Wednesday, has made conflicting statements on the country’s future course of action in the Middle East war.
On Tuesday, Trump said the U.S. was ready to get out of Iran in two to three weeks even if there is no deal, but on Wednesday he said he would not consider a ceasefire until Tehran stops blocking the Strait of Hormuz.
(Reporting by Shariq Khan in New York; Editing by Daniel Wallis)