US oil exports to Europe fell to a two-year low in June

Crude oil exports from the US to Europe fell in June and hit a record low in the past two years.

According to Kpler's report quoted by Reuters, the average daily export volume last month was 1.45 million barrels, 14% lower than the average daily export volume in May, and a 27% decrease compared to 2023/6.

The report points out that the price difference between Brent crude oil and West Texas Intermediate crude oil is narrowing. WTI is currently trading at around $83 per barrel, while Brent crude oil is trading at close to $87.

Furthermore, WTI was incorporated into the constituent stocks of the Brent crude oil benchmark last year, had an impact on overall prices, and was linked to the US benchmark price.

U.S. crude oil exports also fell last month, falling from 4.21 million barrels per day in May to 3.94 million barrels.

Meanwhile, Reuters reported last month that due to the rapid increase in shale oil exports from the US, US production benchmarks are dominant among the constituent stocks of Brent crude oil. According to data from S&P Global Platts, the ratio where WTI Midland determines the price of date-dated Brent crude oil is over 50%.

The change in global benchmark pricing dynamics occurred against the backdrop of record US crude oil exports, which reached an average of 2.94 million barrels per day at the end of 2023. Half of that 1.71 million barrels were destined for Europe.

The main reason for the recent decline is freight rates. WTI plays a dominant role in the price determination process for dated Brent crude oil, and since the gap between the two benchmarks is narrowing, buyers are thinking about saving costs somewhere.