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US imports of Saudi Arabian oil dropped to zero in July, the first time that’s happened for an entire month since 1985, according to preliminary government data.
Saudi oil exports have been disrupted for months as the US-Iran conflict all but shut down Persian Gulf crude flows. Last month, US-bound shipments of the kingdom’s crude ground to a halt, according to US Department of Energy data released Wednesday. It’s a significant decline given that US refiners were buying more than 800,000 barrels of Saudi oil a day earlier this year.
US refiners have been seeking replacements for Saudi cargoes as the closure of the Strait of Hormuz and other war-related disruptions sent prices for barrels linked to the global benchmark soaring. Phillips 66 reduced the proportion of Middle Eastern crudes flowing into its plants to less than 1%, Chief Executive Officer Mark Lashier said Wednesday. The company has been sending light crude from US fields to its New Jersey refinery to replace some foreign grades.
Other US refiners that historically have been heavy users of Saudi oil include Chevron Corp. and PBF Energy Inc. Motiva Enterprises LLC, which owns the nation’s largest refinery in Port Arthur, Texas, is wholly owned by the Saudi state oil company and in normal times processes Mideast oil.
Venezuela has been a big winner in the pivot away from Saudi crude. American refiners imported around 600,000 barrels of the Latin American country’s crude in July, up from roughly 100,000 at the start of the year.
Read More: Saudis Cut Key Oil Price Again as Hormuz Talks Progress
There have been occasional weeks when Saudi deliveries to the US dropped to zero but July was the first time they bottomed out for a full month in more than 40 years. To be sure, the drop may be temporary. US imports of crude from Saudi Arabia are forecast to rebound this month to about 300,000 barrels a day, in line with recent historic norms, according to Kpler data.
— With assistance from Christopher Charleston and Lucia Kassai
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