There may be limitations for U.S. crude oil exports to long-distant economies because of limited port access for large-scale carriers, the government said.

The United States is on pace to become the largest crude oil producer in the world, passing Russia at some point in the near future. Former President Barack Obama ended a 40-year-old ban on U.S. oil exports during his second term, though exports in 2016, his last year in office, were less than 500,000 barrels per day on average.

Last year, exports more than doubled to reach an average of 1.1 million barrels per day. Already this year, total U.S. crude oil exports are at 1.6 million barrels per day on average. A report from the U.S. Energy Information Administration found export levels are increasing even though terminals on the southern U.S. coast can't load the largest types of carriers. Those vessels, dubbed Very Large Crude Carriers, are the most economic for crude oil transportation.

"The inability to fully load larger and more cost-effective vessels has pricing implications for U.S. crude oil exports," the EIA's report read. "Using a number of smaller ships requires a wider price spread between U.S. crude oil and international crude oil prices to compensate for the lower economies of scale."

The spread is the difference in price between West Texas Intermediate, the U.S. benchmark, and Brent, the global benchmark. The spread as of Thursday morning was $7.80 per barrel with the premium for Brent.

Most ports on the Gulf of Mexico can only accommodate vessels with a capacity of 500,000 barrels. Larger classes can carry twice that amount.

"U.S. exports have only been permitted since December 2015 and all the infrastructure in place before was designed to offload crude tankers at the offshore deep water LOOP terminal in Louisiana or to receive smaller vessels offloaded from VLCCs," Sandy Fielden, the director of oil and products research for Morningstar, told UPI. "Gulf Coast ports weren't designed for supertankers."

The port authority at Corpus Christi, which hosts the largest crude oil export terminal, started working on improvements and dredging to the regional shipping channel in the 1990s. A partnership agreement was signed with the U.S. Army Corps of Engineers in September for improvements, but the Texas Railroad Commission, the state's energy regulator, told UPI in December they were still waiting for funding.

The project would widen and deepen the port, allowing million barrel supertankers to load American crude. Inland, meanwhile, the International Energy Agency said there's not enough capacity to take oil away from some of the southern shale basins like Eagle Ford and Permian.

The U.S. steel sector targets the automotive industry, leaving the energy industry depending on a few niche, and overseas, suppliers. The IEA said U.S. steel tariffs "certainly have the potential" to slow down some pipeline projects, but probably won't derail them.

For exports, the EIA said the smaller vessels and associated costs aren't much of a factor when sending U.S. oil over short distances.

"However, as exports to Asia are a growing share of total U.S. crude oil exports, these costs will become more important," the report read.

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Equinor, formally Statoil, opens trading on the Oslo exchange
Washington DC (UPI) May 16, 2018
Shares in Equinor, the company formally known as Statoil, started trading Wednesday for the first time on the Oslo stock exchange, it announced. The company is trading under the ticker symbol EQNR on the Oslo exchange. Implementation of the change takes place on the New York Stock Exchange on Thursday. The board of directors approved of the name change from Statoil to Equinor ASA during Tuesday's annual general meeting. The board of directors in March proposed the name change - d ... read more