U.S. crude oil imports increase 7% in first half of 2016

U.S. gross crude oil imports rose by 7%, or 528,000 barrels a day, in the first half of 2016 compared to the same period last year, according to the U.S. Department of Energy.

This reverses a multi-year trend of decreasing U.S. crude oil imports as a result of increasing U.S. production.

Imports increased by 504,000 barrels a day from Nigeria, Iraq and other members of the Organization of the Petroleum Exporting Countries (OPEC).

But imports declined 118,000 barrels per day from Mexico, offsetting the increase in imports from Canada and limiting the net change in imports from non-OPEC countries to an increase of less than 24,000 barrels per day.

Changes in crude oil price spreads were a significant factor in the rise of U.S. oil imports during the first half of 2016. The narrowing price differences between U.S. and international crudes led refiners to increase imports in areas where imported crudes had a “delivered cost advantage” compared to domestic crudes, according to the DOE.

Also, lower overall crude prices contributed to a 5% decrease in U.S. crude production to 9 million barrels per day in the first half of 2016, from 9.5 million barrels a day in the same period in 2015, resulting in higher net crude oil imports.

In the Gulf Coast region, which includes states such as Arkansas, Texas and Louisiana, imports increased 3%, or 88,000 barrels per day. Rising imports from the Middle East and African countries offset declines from South America. Imports from Iraq increased by 142,000 barrels a day, more than the next four countries combined. Iraq’s production in 2015 increased by 700,000 barrels a day, allowing for more of its production to be exported to the United States.

Imports also increased in all other regions in the United States, except for the Rocky Mountain region. Imports in the region declined by 9% or 24,000 barrels a day.

Annual imports of crude oil are expected to increase in both 2016 and 2017, according to the DOE.