In May, U.S. exports of motor gasoline (combining exports of finished motor gasoline and motor gasoline blending components) averaged 941,000 barrels per day (b/d), 276,000 b/d (41%) higher than the five-year (2016–2020) average. June exports averaged 935,000 b/d, exceeding the five-year average for June by 230,000 b/d (33%). In July, gasoline exports again averaged 935,000 b/d, exceeding the five-year average for July by 181,000 b/d (24%).
The United States typically exports more gasoline in the winter and early spring, when there is less domestic gasoline demand but refinery operations continue to operate to meet seasonally higher distillate demand. Continued refinery operations produce more gasoline than the U.S. market consumes, so the extra production instead contributes to rebuilding seasonal inventories and exports. During the summer, more domestic demand often reduces the availability of gasoline for export, contributing to less exported gasoline during that part of the year. Although the export volumes during May, June, and July were noteworthy because of their elevated levels during the summer, the United States usually exports even more gasoline during the later months of the calendar year.
The vast majority of U.S. gasoline exports come from the U.S. Gulf Coast (PADD 3), which accounts for around 54% of operable refinery capacity in the United States. So far in 2021, 92% of U.S. motor gasoline exports have come from the U.S. Gulf Coast, about 1 percentage point higher than the five-year average share. The U.S. Gulf Coast has substantially more refining capacity than the East Coast (PADD 1), Rocky Mountains (PADD 4), and West Coast (PADD 5), while also having coastal access, which the Midwest (PADD 2), the next largest refining region by capacity, lacks.
Although U.S. exports of distillate fuel oil go to a relatively diverse set of destinations, exports of motor gasoline from the United States go primarily to Mexico. Exports to Mexico typically have accounted for between 50% and 70% of total U.S. gasoline exports over the past five years (Figure 2). Gasoline exports to Mexico were a major contributor to increased summer exports in 2021, averaging 619,000 b/d in May, 519,000 b/d in June, and 551,000 b/d in July. The United States exported more gasoline to Mexico in May and June than in those months before; in particular, exports reached the most elevated level for May at 270,000 b/d (77%) above the previous five-year average for May. Exports in June and July were also well above average, although by relatively smaller margins at 112,000 b/d (28%) and 69,000 b/d (14%), respectively.
More U.S. exports to Mexico came in spite of increasing regulations on fuel importers in Mexico, including recent changes to the Mexican government’s General Rules of Exterior Trade, which became effective in mid-June 2021 and could restrict the options available to private companies to import motor gasoline and other petroleum products into Mexico. These restrictions exclude Mexico’s national oil company Petróleos Mexicanos (PEMEX). However, Mexico imported more gasoline than average during this period for several reasons. A refinery fire at PEMEX’s 285,000-b/d Minatitlan refinery required extensive repairs, resulting in reduced PEMEX gasoline production by an estimated 20% in May and 26% in June compared with their five-year averages, based on reports from PEMEX. In addition, a cyberattack temporarily disrupted the ability to move product along the critical Colonial Pipeline system in May, which might have also put pressure on Gulf Coast refiners to export volumes that would otherwise been distributed within the United States.
Although most of the United States’ increase in gasoline exports went to Mexico during May, during June and July, additional gasoline exports were split between Mexico and other destinations. No single country imports gasoline from the United States in volumes comparable to Mexico (Figure 3). On a regional basis, the next largest destinations for U.S. gasoline exports are concentrated elsewhere in the Americas. Brazil accounted for 7% of total U.S. gasoline exports in June and 6% in July, importing 61,000 b/d of U.S. gasoline in June and 59,000 b/d in July, both above the five-year high for Brazil for those respective months. U.S. gasoline exports to Brazil in both June and July 2021 were 25,000 b/d higher than the five-year average, representing a 70% increase in June and a 73% increase in July.
Although a relatively small importer compared with other countries, El Salvador also imported record volumes of U.S. motor gasoline in June and July. U.S. gasoline exports to El Salvador averaged 33,000 b/d in June and 26,000 b/d in July. The two months mark the most and second-most monthly gasoline exports to El Salvador since we began reporting country-level gasoline exports in 1993. As a share of overall U.S. gasoline exports, however, exports to El Salvador usually hold a relatively small share at between 1% and 2%, although its share increased to nearly 4% in June and nearly 3% in July.
Other major destinations for U.S. total motor gasoline exports include Guatemala (which accounted for an average of 5.6% of U.S. gasoline exports from May through July), Canada (4.4% of exports), Peru (3.4% of exports), Panama (3.2% of exports), Colombia (2.7% of exports), and Costa Rica (2.0% of exports). U.S. exports to several of these countries are near or above the five-year highs for some or all of May, June, and July, further contributing to elevated U.S. gasoline exports during the summer of 2021.
While gasoline exports have been elevated during the summer, U.S. imports of gasoline have also been elevated through much of 2021. Cold weather refinery outages in February led to increased imports in March to compensate for the lost production, but imports have remained above the five-year average and often above the five-year high even after U.S. refineries resumed operations (Figure 4).
Increases in both U.S. imports and exports may reflect changing logistical conditions within the United States, or they may reflect competitively priced gasoline imports from elsewhere in the Atlantic Basin. Although the Gulf Coast has historically been the primary supplier of fuels to the East Coast, this supply chain relies on the petroleum product pipeline capacity connecting the two regions. In instances where pipeline capacity is full and there is no spare capacity, East Coast distributors may find it more cost effective to import waterborne cargo rather than purchase volumes from the Gulf Coast that must be transported to their destination by rail or barge. For example, the Colonial Pipeline cyberattack likely contributed to increased imports into the East Coast to meet shortfalls. Increased gasoline imports to the East Coast may also reflect low prices in Europe because of higher inventories there, leaving Gulf Coast refiners with additional inventory that may have otherwise gone to the East Coast but was instead redirected into exports elsewhere in the Americas. Gasoline imports into the West Coast were also higher this summer, a region that traditionally supplies most of its own fuels but is likely increasing imports as a result of refinery closures during the past year.
U.S. average regular gasoline and diesel prices increase
The U.S. average regular gasoline retail price increased nearly 2 cents to $3.19 per gallon on October 4, $1.02 higher than a year ago. The Midwest price increased nearly 4 cents to $3.07 per gallon, the West Coast price increased more than 2 cents to $3.94 per gallon, and the East Coast price increased nearly 1 cent, remaining virtually unchanged at $3.08 per gallon. The Rocky Mountain price decreased 1 cent to $3.57 per gallon, and the Gulf Coast price decreased nearly 1 cent, remaining virtually unchanged at $2.84 per gallon.
The U.S. average diesel fuel price increased more than 7 cents to $3.48 per gallon on October 4, $1.09 higher than a year ago. The Midwest price increased more than 10 cents to $3.43 per gallon, the East Coast price increased nearly 7 cents to $3.44 per gallon, the Gulf Coast price increased more than 6 cents to $3.20 per gallon, the West Coast price increased 4 cents to $4.07 per gallon, and the Rocky Mountain price increased nearly 4 cents to $3.64 per gallon.
Propane/propylene inventories decline
U.S. propane/propylene stocks decreased by 0.6 million barrels last week to 72.3 million barrels as of October 1, 2021, 18.4 million barrels (20.3%) less than the five-year (2016-2020) average inventory levels for this same time of year. Gulf Coast and East Coast inventories decreased by 0.4 million barrels and 0.3 million barrels, respectively, and Rocky Mountain/West Coast inventories decreased slightly, remaining virtually unchanged. Midwest inventories increased by 0.1 million barrels.
Residential heating fuel price survey begins this week
Beginning this week and continuing through the end of March 2022, prices for residential and wholesale heating oil and propane will be included in This Week in Petroleum and on EIA’s Heating Oil and Propane Update webpage.
As of October 4, 2021, residential heating oil prices averaged more than $3.17 per gallon, more than $1.04 per gallon higher than at the same time last year. The average wholesale heating oil price for the start of the season averaged more than $2.51 per gallon, almost $1.32 per gallon above last year’s price.
Residential propane prices entered the 2021–22 heating season at an average of nearly $2.59 per gallon, almost 82 cents per gallon higher than at the same time last year. Wholesale propane prices averaged more than $1.63 per gallon, nearly 99 cents per gallon higher than the October 5, 2020, price.
For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.