Corpus Christi has replaced Houston as the largest port for U.S. crude exports. Although COVID-19 is injecting extreme uncertainty into energy markets, Corpus will likely remain the king of U.S. crude oil exports due to its proximity to producing basins, pipeline and storage buildouts, and commercial operation of new export terminal capacity.

COVID-19 and exports

COVID-19’s impacts on oil markets are subject to considerable uncertainty: the crisis is in its early days, and there is no analogous situation in the modern era. Still, we think we can draw three key tentative conclusions.

First, U.S. crude exports will fall sharply due to COVID-19.  Indeed, with world crude demand down 20-35%, U.S. exports in the week ending March 27 stood at 3.16 million barrels per day, down 24% from a month prior. Second, crude terminal projects will likely face delays due to financial and physical constraints. Oil and gas companies are reducing their CAPEX budgets, and construction crews will find it difficult to work amid physical distancing. We expect that terminals under construction will face delays. Finally, we expect that COVID-19 will slow development of Corpus Christi infrastructure, but the South Texas port is here to stay.