More of Europes crude supply is coming from deep in the heart of Texas

div classBodysc17zpet90 cdBBJodivpBy Arathy Somasekhar and Stephanie Kellyp

pHOUSTON Reuters – U.S. crude exports to Europe climbed in March and April as buyers across the Atlantic snapped up the countrys light sweet grades to offset the expected loss of Russian oil, according to shipping data, traders and analysts. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pAs the European Union weighs an oil embargo on Russia over its invasion of Ukraine, U.S. exporters are ramping up shipments of U.S. light crude to Europe, helped by Washingtons decision to release 180 million barrels of oil from the U.S. Strategic Petroleum Reserve, which is flooding the domestic market. p

pU.S. crude exports bound for Europe are close to 1.5 million barrels per day bpd so far in April, the highest in two years and one of the strongest months on record, said Matt Smith, lead oil analyst for the Americas at data provider Kpler. Most cargoes are carrying light sweet grades, he added, headed to European destinations including Spain, the United Kingdom, Denmark and Italy.p

pWith oil at more than 100 per barrel, production is rising in the Permian basin, the top U.S. shale field. Output is projected to hit a record 5.1 million bpd next month, according to the Energy Information Administration. U.S. Gulf Coast refiners prefer to run heavy sour grades, leaving most lighter crudes available for exports, traders said.p

p“With a number of refiners currently shunning Russian crude, the demand for replacement barrels is adding to the call on U.S. crude,” said David Wech, chief economist at oil analytics firm Vortexa. Light sweet crudes are easier to process by less complex refineries, often helping them offset higher processing costs, he added.p

pRussia is Europe‘s largest oil supplier, providing just over a quarter of the continent’s imports in 2020, according to the blocs statistics office Eurostat.p

pSWEET FLAVOR p

pAt least 65 of U.S. crude shipped to Europe in March was identified as WTI Midland in U.S. Customs data on Refinitiv Eikon, a 63 increase from the same month last year. The cargoes, most of which are priced from the Magellan East Houston terminal, carried about 22 million barrels overall.p

p“Europeans are looking for alternative supplies and the U.S. is a useful market for bringing those light sweet grades to Western and Eastern European countries,” a trading source familiar with the European markets said.p

pBritish refineries, which plan to phase out Russian oil imports by the end of the year, last month bought the largest volume of U.S. crude in twoandahalf years, Eikon data showed.p

pMost cargoes were U.S. light sweet oil, with at least a quarter delivering Midland crude, according to U.S. Customs data, which breaks out the source grade.p

pSpain is set to import a record 7 million barrels of U.S. crude in April, according to cargo tracking data, after a peak in March of nearly 6 million barrels discharged for refiners including Repsol, Cepsa and BP. p

pRepsol, Cepsa and BP did not immediately respond to requests for comment.p

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pp Reporting by Arathy Somasekhar in Houston and Stephanie Kelly in New York Editing by Chris Reesep

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