Shale Oil Production Could Mean Refinery Bottlenecks

Though U.S. oil fields are cranking out the crude (and are boosting local economies), a report from consultancy Wood Mackenzie is showing that increased shale oil production could overwhelm the nation’s Gulf Coast refining capacity. Unless new infrastructure is built at U.S. Gulf Coast ports, there could be a bottleneck, according to the report.

The issue is that most U.S. refiners run medium and heavy crude oil, with the forecast indicating they will absorb between 900,000- 1 million barrels per day (bpd) of the anticipated 4 million bpd expected to come from the U.S. oil fields. However, U.S. refineries won’t be able to handle the remainder: three-quarters of additional crude and light-crude oil, known as condensate. These lighter crudes could end up in Europe.

Perhaps unsurprisingly, Wood Mackenzie is forecasting about half of the light-crude output to come from the Permian Basin.

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