-- US crude exports are set to reach 5 million barrels per day in May as global supply disruptions drive demand, Bloomberg said in a Thursday analysis.
Shipments from the US Gulf Coast are already nearing 4.9 million b/d in April, up from about 3.97 million b/d in March, according to the analysis.
The increase reflects stronger overseas demand, particularly from buyers seeking alternatives to constrained Middle Eastern crude supplies, according to the report.
Analysts expect flows to rise further in May, supported by a growing number of very large crude carriers loading in the region to meet stronger export demand.
Matt Smith, Kpler's commodity research director, said exports in May may climb past 5 million b/d, topping the earlier 4.5 million peak, supported by continued strong buying interest from Asia, according to the analysis.
The surge comes as global markets face severe supply tightness, with US exports playing a key role in stabilizing flows amid geopolitical disruptions, according to the analysis.
With summer demand approaching, rising exports could force US refiners to pay more to retain supply, while gasoline prices above $4 per gallon may increase political pressure ahead of midterm elections.
Exports have briefly neared 5 million b/d, according to the EIA, but haven't held that level over a month, suggesting May could mark the first sustained period near that threshold, according to the analysis.
Around 28 supertankers have been booked for May loadings, far above the typical five at this time of the month, the analysis added.
Some projections suggest exports could climb as high as 5.3 million b/d if current vessel scheduling trends hold, supported by continued buying interest from Asia.
A recent shipment saw the VLCC Asian Progress VI fixed to carry crude from Occidental Petroleum to East Asia for about $19 million, the analysis added, citing a Bloomberg note.
Despite strong demand, the US export system is nearing capacity limits, with logistical challenges beginning to constrain further growth, the analysis said.
Limited vessel availability, a shortage of smaller feeder ships, and rising freight costs could cap exports near 5.5 million b/d without additional shipping capacity, according to the analysis.