U.S. crude oil imports from OPEC are down, but imports from Canada remain high

IEA Stock Release And Opec+ Modest Increase Fail To Halt Oil/Gas Price Rally

Crude oil imports into the United States reached a peak in 2005, but they dropped 42% between 2005 and 2020 to an average of 5.9 million barrels per day (b/d), the lowest level since 1991. During this period, U.S. crude oil imports from OPEC members decreased rapidly, but imports from non-OPEC members remained relatively high. In particular, crude oil imports from Canada more than doubled to an average of 3.6 million b/d. As a result, Canada’s share of total U.S. crude oil imports increased, reaching a record-high share of 61% in 2020. Weekly preliminary crude oil imports by country of origin (four-week rolling average) show that U.S. crude oil imports from Canada in 2021 (as of April 23) have been down only slightly from the same period in 2020. At the same time, imports from selected members of OPEC are down by 48%. (EIA does not collect weekly data on every member of OPEC.) Voluntary OPEC production cuts are contributing to lower U.S. crude oil imports from OPEC members. The comparatively stable U.S. crude oil imports from Canada, however, are mostly the result of longer-term trends in Canada’s crude oil production and refining economics.

Weekly imports (on a four-week rolling average basis) in 2020 hit a low the week of September 18 at 5.1 million b/d but have generally trended upward since then. In mid-February, however, extreme weather caused port closures and refinery shutdowns in the Midwest (PADD 2) and Gulf Coast (PADD 3), contributing to a short-lived drop in imports. Year-to-date average weekly U.S. crude oil imports in 2021 (as of April 23) are 9% below the same period in 2020. Imports from Saudi Arabia (which accounted for 61% of U.S. crude oil imports from OPEC in 2020) through April 23, are 37% lower in 2021 than during the same period in 2020, while imports from Canada are down less than 1% during the same period (Figure 1).

Figure 1. U.S. four-week rolling average crude oil imports

Because of increased domestic production of light crude oil, U.S. imports of medium and light crude oils have decreased. U.S. imports of heavier crude oils have remained comparatively stable, averaging between 3.8 million b/d and 4.8 million b/d between 2009 and 2020 and accounting for 64% of total crude oil imports in 2020 (Figure 2). U.S. crude oil production grew significantly between 2009 and 2020. Because light crude oil (which has an API gravity of at least 35 degrees) has accounted for most of the growth in crude oil produced in the United States, U.S. demand for imports of light crude oil grades has decreased. This trend has resulted in declining crude oil imports from OPEC, which have historically been largely medium and light crude oil grades. Imports from OPEC in 2020 averaged 816,000 b/d, the lowest level in annual EIA data going back to 1973. Many U.S. refineries are set up to process heavy crude oil, contributing to demand for non-OPEC imports of heavy crude oil, especially from Canada.

Figure 2. Percentages of U.S. crude oil imports by API gravity

U.S. imports of heavy crude oil increased from 43% of total U.S. crude oil imports in 2009 to 64% in 2020. The Midwest imported the most heavy crude oil in both 2019 and 2020, surpassing the Gulf Coast, which had imported the most heavy crude oil from 2009 through 2018. Imports of heavy crude oil from Canada accounted for nearly all of the heavy crude oil imported into the Midwest, increasing from 883,000 b/d in 2009 to 1.8 million b/d in 2020. U.S. heavy and medium crude oil imports from OPEC countries fell 80% from 2009 to 2020, while imports of heavy and medium crude oils from Canada increased 104% during the same period.

U.S. imports of crude oil from Canada have generally had lower landed costs (the price at the port of discharge including charges associated with the purchase, transportation and insurance) than crude oil imports from other countries, contributing to the increase in heavy crude oil imports from Canada. In the Gulf Coast, the volume-weighted average landed cost of heavy crude oil from Canada was $9 per barrel (b) less than the volume-weighted average of heavy crude oil imports from other countries (including Mexico, Colombia, Brazil, Iraq, Saudi Arabia, and Russia) in 2019, and $4/b less in 2020. However, pipeline capacity to deliver crude oil from Canada to the Gulf Coast is limited, and the Gulf Coast continues to import heavy crude oil from other countries.

Increasing domestic production of light crude oil has displaced crude oil imports to the Gulf Coast. Based on our crude oil import tracking tool, the largest decrease in Gulf Coast imports was in light crude oils, which declined 99% between 2009 and 2019, with declines of 79% in medium crude oils and 30% in heavy imports (Figure 3). Total crude oil imports to the Gulf Coast in 2020 also declined, but this drop was mostly driven by the decline in refinery runs as a result of responses to COVID-19. From 2009 to 2019, the average API gravity of crude oil input into Gulf Coast refiners increased from 29.6 degrees to 33.5 degrees, indicating a shift toward lighter crude oils.

Figure 3. Crude oil imports into U.S. Gulf Coast and Midwest by grade

Not only have U.S. crude oil imports declined, but imports have come from fewer countries. Oil was imported from 44 countries in 2009, but as domestic tight oil production has increased, the number of source countries has fallen. U.S. crude oil imports in 2020 originated from 32 countries.

As U.S. crude oil production grew, imports from OPEC countries declined every year from 2011 to 2020, with the exception of 2016. In 2019, crude oil imports from OPEC fell by 1.1 million b/d (43%) from 2018. The decline in 2019 was partially driven by U.S. sanctions on Venezuela that prohibited crude oil imports from the country and eliminated crude oil imports completely by May 2019. In 2009, 48% of all U.S. crude oil imports came from OPEC countries. Between 2009 and 2020, crude oil imports from OPEC countries dropped from 4.4 million b/d to 816,000, b/d and the share of U.S. crude oil imports from OPEC countries dropped to 14%.

Record amounts of crude oil was produced in Canada in 2019, which contributed to record-high U.S. crude oil imports from Canada. U.S. crude oil imports from Canada averaged 1.9 million b/d in 2009 and increased every year through 2019, when they averaged 3.8 million b/d. In 2020, U.S. crude oil imports from Canada remained relatively high, dropping only 6% to 3.6 million b/d when total U.S. crude oil imports fell by 14%. As a result, the share of U.S. crude oil imports originating in Canada increased from 22% in 2009 to 61% in 2020.

U.S. average regular gasoline price increases, diesel price unchanged

The U.S. average regular gasoline retail price increased nearly 2 cents to $2.87 per gallon on April 26, $1.10 higher than the same time last year. The West Coast price increased nearly 3 cents to $3.55 per gallon, the Midwest and Gulf Coast prices each increased more than 2 cents to $2.80 per gallon and $2.59 per gallon, respectively, the Rocky Mountain price increased 2 cents to $2.99 per gallon, and the East Coast price increased nearly 1 cent to $2.76 per gallon.

The U.S. average diesel fuel price remained unchanged at $3.12 per gallon on April 26, 69 cents higher than a year ago. The West Coast price increased nearly 1 cent, remaining virtually unchanged at $3.65 per gallon, and the Midwest price increased less than 1 cent to $3.06 per gallon. The Gulf Coast price decreased nearly 1 cent, remaining virtually unchanged at $2.92 per gallon, the Rocky Mountain price decreased less than 1 cent, remaining virtually unchanged at $3.23 per gallon, and the East Coast price decreased less than 1 cent to $3.09 per gallon.

Propane/propylene inventories rise

U.S. propane/propylene stocks increased by 0.5 barrels last week to 41.0 million barrels as of April 23, 2021, 8.7 million barrels (17.5%) less than the five-year (2016-2020) average inventory levels for this same time of year. Gulf Coast inventories increase by 0.5 million barrels, and Rocky Mountain/West Coast and East Coast inventories each increased by 0.1 million barrels. Midwest inventories decreased by 0.3 million barrels.