MOSCOW (MRC) -- More petroleum (including crude oil and refined products) was exported from the United States in 2020 than was imported. U.S. net imports (gross imports minus gross exports) of petroleum declined from 670,000 barrels per day (bpd) in 2019 to an estimated -700,000 bpd in 2020, said Hydrocarbonprocessing.
The U.S. Energy Information Administration’s (EIA) February 2021 Short-Term Energy Outlook (STEO) estimates that 2020 marked the first year that the United States was a net petroleum exporter on an annual basis. Declining net imports of crude oil primarily drove this change from being a net importer to a net exporter. In 2021 and 2022, EIA expects the United States to return to being a net petroleum importer, averaging 230,000 bpd in 2021 and 550,000 bpd in 2022.
The STEO model forecasts petroleum trade in terms of net imports rather than gross imports and gross exports. In 2020, 81% of the decline in net imports of petroleum was crude oil. EIA expects that increasing crude oil imports will drive the growth in net petroleum imports in 2021 and 2022 and more than offset declines in refined product net imports. In 2020, net imports of crude oil fell to a low of 2.3 MMbpd in the third quarter, down from 3.9 MMbpd in the third quarter of 2019. EIA forecasts that net imports of crude oil will increase, averaging 3.7 MMbpd in 2021 and 4.4 MMbpd in 2022. EIA expects that more imports of crude oil will be needed because crude oil inputs to U.S. refineries will increase more than domestic crude oil production.
Total U.S. demand of petroleum products—as measured by product supplied— declined by an estimated 2.5 MMbpd (12%) in 2020. U.S. petroleum demand dropped significantly in the first half of 2020 because of responses to the COVID-19 pandemic, but it increased in the second half of the year. EIA expects petroleum consumption to continue to recover from the effects of the pandemic as the vaccines for COVID-19 become more widely distributed and travel and economic activity increase. EIA forecasts total U.S. petroleum demand will grow by 1.4 MMbpd (7%) in 2021 and 1.0 MMbpd (5%) in 2022.
In the second quarter of 2020, U.S. refiners responded to the pandemic-driven drop in petroleum product consumption, high inventories, and reduced profitability by implementing steep cuts in refinery runs (Figure 2), which dropped 2.6 MMbpd to an average of 13.2 MMbpd. In the third and fourth quarters of 2020, product consumption increased, and refiners increased runs to average 14.0 MMbpd in the second half of 2020, which was still less than the second half of 2019 average of 16.6 MMbpd. Annual refinery inputs of crude oil declined 2.3 MMbpd (14%) in 2020. EIA expects refinery runs to increase by 0.9 MMbpd (6%) in 2021 and by 1.1 MMbpd (7%) in 2022 as domestic and foreign petroleum demand increase.
We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.
We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
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