This article is over 9 years old


Bottleneck In US Pipeline Network Driving Up Cost Of Crude Imports

A new report on the oil and gas sector by professional services firm Ernst & Young shows the U.S. pipeline network is increasingly out of sync with crude supplies.


To embed this piece of audio in your site, please use this code:

<iframe src="" style="height: 115px; width: 100%;"></iframe>

The U.S. crude pipeline network was primarily designed to move crude from the Gulf Coast to the north. That’s creating a problem as output increases at unconventional fields in the northern U.S. and Canada.  

Marcela Donadio is Ernst & Young’s Americas oil and gas sector leader. She says it’s causing an increasing disconnect between the prices of West Texas Intermediate oil, the U.S. benchmark, and Brent crude, the standard for most international supplies.

“Right now, you’re seeing a discount of WTI pricing of about $15 when compared to Brent, and it is a reflection of that, the fact that there are abundant supplies that really cannot be readily moved from Cushing, Oklahoma, to the Gulf Coast to the East Coast.”

Donadio says the result is that U.S. businesses are paying more for feedstocks derived from imported crude. That’s adding to upward pressure on prices for gasoline, jet fuel and other petroleum products.

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required

Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media's coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media's business reporter, covering the oil...

More Information