Crude oil pipelines connecting the busiest Texas oil fields to a critical export hub across the state are nearly out of space, threatening to cap US oil exports at a time when the world needs more.
Key pipelines that transport barrels produced in the Permian Basin to the Port of Corpus Christi are more than 90% full, and companies that operate some of these lines say the congestion is likely to get worse. By the second half of 2025, the pipes could be 94% or 95% full, estimates researcher East Daley Analytics.
Demand for the limited pipeline space comes at a time when the US is producing more crude oil than any other nation, with output set to hit a new record next year. The Permian region, one of the top producing shale basins in the world, accounts for nearly half of all US oil production. While output is set to keep growing, it will be difficult for that incremental output to reach international buyers without ample pipeline space.
If growth in the US’s crude exports stalls, it threatens to create pockets of oversupply domestically and exacerbate supply tightness in other regions of the world, which have come to rely on US barrels more than ever after Russia’s invasion of Ukraine and OPEC+ supply curbs. Demand from China and the price of Brent crude will all play a role as well in the medium-term supply-demand balance, said Kristy Oleszek, East Daley’s director of energy analytics.
To be sure, some of the oil may be rerouted to the Houston area instead, alleviating some congestion. OneOK’s Longhorn and BridgeTex pipelines in particular could offer alternative options to get barrels down to the Gulf Coast.
Meanwhile, a plan to expand Enbridge Inc.’s Gray Oak pipeline system will likely reduce some bottlenecks to Corpus Christi. Still, East Daley estimates even the company’s goal of increasing capacity on the line by 120,000 barrels per day won’t bring overall regional utilization below 90%. When asked about the expansion, Enbridge pointed to its upcoming earnings call on Friday that might provide more information.
