Is there demand elsewhere in the world for the US produced light oil? Are other nation’s refineries see up to process light oil?
World demand continues to grow. As new international refineries are built, it is cheaper to design for light sweet oil than heavy sour.
The world refinery growth will target that supply, if it is available. The US refinery growth and upgrades will also target it as well.
As for current demand, the light sweet sells for a higher price than the heavy sour, so it is far to say the current “demand” for it is greater.
If other countries are willing to buy our light oil why not? One of the problems with politicians is that they really don’t know what they are doing when it comes to making policy. The government tends to be the main producer of unintended consequences.
But with imports of light oil down to just half a million barrels per day, according to the EIA, refiners are running out of room to maneuver.
Imports from Nigeria, one of the principal sources of light crude, have already fallen from more than 1 million barrels per day in 2010 to zero in July 2014.
There is not much more room to accommodate rising domestic light oil production by backing out more imported light crude.
Petroleum is a very complex product and life at a refinery is all about design balance. Once the capital equipment is installed to process heavier crudes they become very profitable to distill, due to the discount between the price of heavy crudes and light sweet crudes. Light sweet crude can be refined into gas, kerosene and diesel. Turns out that the Gulf refineries switched to processing heavy crudes over the last 20 years, and are profitable because of it. Of course, please check with professionals like thackney, ckilmer and bestintxas for a reality check.