Contrasted with steeply rising Canadian and Saudi flows, U.S. crude oil imports from the rest of the world declined by an aggregate 703,000 bbl/d year-over-year. This decline was led by a 538,000-bbl/d plunge in imports from Nigeria. East Coast refineries accounted for roughly half the drop in Nigerian imports, or 268,000 bbl/d, likely due to the idling of struggling refineries that ran in part on a diet of high-cost, light, sweet Nigerian crude, including ConocoPhillips' 185,000-bbl/d Trainer refinery and Sunoco's 178,000-bbl/d Marcus Hook plant, both near Philadelphia. Sunoco, which is being purchased by Energy Transfer Partners, has said that it might also close its 335,000-bbl/d Philadelphia refinery by August if no buyer is found. The fate of that plant continues to be unclear. Meanwhile, the Trainer refinery now looks set to reopen following its recently-announced purchase by a unit of Delta Air Lines. Regardless of these plants' future, however, some Nigerian import volumes into the East Coast may have been permanently displaced by domestic Bakken crude, small volumes of which are now being shipped by rail to both Sunoco's Eagle Point, New Jersey terminal near Philadelphia and to Albany, NY, from where it can be barged to refineries in New York Harbor and the Philadelphia area.
It is also important to note that the first-quarter decline in Nigerian crude imports was not limited to the East Coast. Shipments to the Gulf Coast declined by 274,000 bbl/d year-over-year, along with light, sweet crude imports of other origins, including other West African producing countries, Algeria, the North Sea, Central Asia and Latin America. In total, Gulf Coast crude imports fell by 354,000 bbl/d year-over-year, led by light, sweet grades, while drops in sour crude imports from Venezuela and Mexico were more than offset by robust gains from both Saudi Arabia and Kuwait.
Rising tight oil production in the Midwest (most of which is light, sweet crude) has lessened the need for imports through the Gulf Coast to serve that region. At the same time, increasing tight oil production in Texas has added a new source of light, sweet crude to the Gulf market itself, further diminishing the need for imports. Add to that the increasing ability of the U.S. refining complex to process heavy, sour crudes and you have a set of drivers that support a weakening in the price of U.S. light, sweet crudes in relation to heavy, sour crude prices which have held up relatively well in the recent crude market downturn. Should recent trends be confirmed, East Coast refiners using light, sweet crude that, until recently, appeared to operate at a cost disadvantage may soon benefit from a marked improvement in their crude acquisition costs.