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First U.S. Oil Tanker Arrives In Europe

News Article by Hanby PetroAnalysis

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0dd27381-7117-4eb3-a849-0fba7e0831c0The first oil tanker to sail from the US after restrictions were lifted on the country’s crude exports has arrived in Europe, a landmark moment for an industry battling a collapse in prices.

Carrying a cargo dubbed “Liquid American Freedom” by the US House energy and commerce committee members, the ‘Theo T’ Panamax oil tanker docked at the French port of Fos on Wednesday, having left Texas almost three weeks ago.

Vitol, the world’s largest independent oil trader, is expected to unload the cargo at the port near Marseille, where it will then be carried by pipeline to one of two refineries the company operates in Europe under a joint venture with Carlyle Group.

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The most likely destination is the Cressier refinery in Switzerland operated by the Vitol and Carlyle joint venture, Varo Energy, trading sources say. But there is also a potential pipeline route to Varo Energy’s refinery in Bavaria.

Exports of US crude oil have been restricted since the Arab oil embargoes of the 1970s. But in late December the US lifted the ban, with its domestic shale industry laboring under the biggest oil slump of the postwar era.

“The flows themselves are not substantial yet but this is only the start,” said Olivier Jakob at Petromatrix, a consultancy in Zug, Switzerland.

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“US oil exports will ultimately be transformational for the industry, allowing not just higher exports of US shale but also other grades and Canadian oil. For traders it is a big opportunity, with the US set to not only export more but also import more,” he added.

Oil prices have fallen by almost 75 per cent over the past 18 months, as Opec, the producer cartel, has tried to cut off rising output from higher cost sources like US shale, Canadian tar sands and Brazilian ultradeepwater fields.

US shale output has so far surprised many in the industry with its resilience to lower oil prices, even as producers have been forced to idle rigs and lay off staff.

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