U.S. energy firms should consider more storage facilities, such as an aboveground tank, as the level of crude oil exports continues to surpass the predicted volume of several industry reports.
For instance, the Energy Information Administration (EIA) said that the fracking boom in the Permian Basin has mostly led to the surge in production. In June, the volume of oil exports reached 2.2 million barrels per day (bpd). The monthly average for the first half of 2018 rose by nearly 80% year over year.
The U.S. could be the leading source of crude oil worldwide if the current numbers persist in the future. By 2020, the volume of exports is expected to grow twice the current number of shipments. Energy companies would likely continue to ship crude oil to China, which accounted for the majority of exports in the first half.
Canada ranked as the second biggest market in the same period. However, the Asia-Pacific markets continue to be an important source of business trade for energy companies. Other than China, countries such as South Korea and India accounted for combined exports of 200,000 bpd between January and June.
An increase in production and shipments means more business for exporters, but the growth may not be sustainable if there are capacity constraints for crude oil storage. Aside from aboveground tanks, there is a need to build more export terminals.
Another reason to hasten the construction of new terminals involves discounted prices. Producers from the Permian Basin sell oil at lower prices due to the lack of pipelines that would have brought the commodity to refiners.
When choosing a new storage facility, it’s better to hire a contractor with experience in building and maintaining storage tanks that are compliant with industry regulations. Some of these standards include the API 650 guidelines.