U.S. petroleum imports from Saudi Arabia have dropped to their lowest level in nearly four years, coinciding with an increase in Canadian petroleum exports to the Gulf Coast region.

With the expansion of Canada's "Trans Mountain" pipeline, the capacity for sending petroleum from Canada’s Pacific Coast has nearly tripled, reaching 890,000 barrels per day, and significantly altering global trade flows.

According to the US Energy Information Administration, U.S. petroleum imports from Saudi Arabia fell to 13,000 barrels per day in the week ending October 25.

Data from Kepler indicates that Gulf Coast refineries reduced petroleum imports from Saudi Arabia to 23,000 barrels per day in October, marking a record low. Overall, these refineries are projected to average imports of around 50,000 barrels per day from Saudi Arabia in 2024, approximately 63% lower than last year.

Meanwhile, American refinery imports of Canadian petroleum surged to a record high in July, facilitated by the expanded Trans Mountain pipeline. Marathon Petroleum refineries in Los Angeles and Anacortes, Washington, and Phillips 66 in Ferndale, Washington—all of which were buyers of Saudi petroleum last year—have become major purchasers of Canadian petroleum in 2024.

Rohit Rathod, an analyst at Vortexa, a shipping analytics firm, noted that the increased flow from the Trans Mountain pipeline to the Gulf Coast has effectively pushed Saudi petroleum out of these markets.

However, Saudi petroleum exports to the Gulf Coast are expected to continue, as Saudi Aramco supplies petroleum to the Motiva refinery in Texas.

According to a Reuters report, Saudi Aramco, the world’s largest petroleum exporter, cut the price of its Arab Light crude for Asia to its lowest level in three years in October, but the price reduction for the U.S. market was considerably smaller.

BY WPB