The United States’ crude oil shipments to Europe fell in June, reaching a two-year low. According to the analysis, West Texas Intermediate is becoming more expensive for consumers as the difference between it and Brent oil narrows. WTI is now trading at about $83 per barrel, while the price of Brent crude is almost $87 per barrel.
Furthermore, the addition of WTI to the Brent crude standard last year changed its price overall and strengthened its link to the cost of the US benchmark. Last month, the total amount of crude oil exported from the United States decreased, from 4.21 million barrels per day in May to 3.94 million barrels per day. According to Reuters last month, surging shale oil exports from the US have made the U.S. benchmark the main component of Brent crude composition.
As a result of record-breaking daily average U.S. crude exports at the end of 2023 which topped 2.94 million barrels the mechanics of price-setting for the global benchmark changed. Of it, 1.71 million barrels per day, or half, were shipped to Europe.
The main cause of the current fall is the cost of goods. Buyers would normally attempt to save money somewhere, and that somewhere would be shipping expenses, preferring oil coming from a closer place than the U.S., given WTI’s leading role in the price-setting process for dated Brent and a shrinking difference between the benchmarks.
