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Europe's Gasoline Exports to US Hit Lowest Seasonal Level Since 2020, Reuters Analysis Shows

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European gasoline exports to the US during the peak summer driving season have dipped as the region deals with rising internal demand and supply constraints amid refinery closures and Iran conflict-related issues, according to a Reuters report, citing data.

Shipments of gasoline and blending components from the continent averaged 1.63 million barrels per day in May, down from 1.9 million bpd during the corresponding period a year ago, according to data from Kpler.

This marked the lowest level for May since 2020, at the height of the COVID-19 pandemic, with second-quarter gasoline exports to the US not expected to fare any better, at 252,000 bpd, which is again the lowest for the time of year since 2020, with 88% of it headed to ports on the East Coast.

According to Energy Aspects, the gasoline supply market, globally, is expected to show a deficit of 1 million bpd in May and 1.13 million bpd in June, which are significantly above their respective five-year average deficits of 489,000 and 352,000 bpd.

This also comes at a time when US gasoline inventories hit their lowest levels since 2014 earlier this month, at just 215 million barrels.

Rachel Lauffer, an analyst at Energy Aspects, told Reuters that exports will continue to remain low amid refinery closures and increased domestic demand.

The firm further expected gasoline demand across Europe's largest economies to rise by 120,000 bpd to 2.46 million bpd in June.

This is adding to the tightness in global gasoline and distillates markets, with Neil Crosby of Sparta Commodities warning that even if developments in the Middle East were to progress smoothly, "we are months away from normal supply-demand," while adding that the current oversold prices were reflecting the same.

Janiv Shah of Rystad Energy echoed similar views, noting that refiners were changing their yields to maximize the output of diesel and jet fuel, leading to shortages in gasoline.

"The market is not structurally short, but the balance looks increasingly vulnerable heading into peak summer demand," Shah said.

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