3 energy companies to benefit from record Gulf Coast oil export – June 28, 2022

The Gulf of Mexico accounts for a significant portion of crude oil production in the United States. With the projection that US Gulf Coast crude oil exports could reach a record high, the outlook for energy players operating in the region looks bright. Companies likely to benefit from the development are BP plc (BP free report), Hess Company (IT IS free report) and Shell plc (SHEL free report).

Massive Gulf Coast Oil Export

U.S. Gulf Coast crude oil exports may hit a record 3.3 million barrels per day (bpd) in the June quarter, according to analyst Rystad Energy. This is due to the massive demand for US oil from Europe, as the European Union decided to ban the import of Russian oil by sea by the end of this year.

The huge export of crude is supported by the bold decision of the United States to release 180 million barrels of oil from the country’s strategic petroleum reserve, thereby offsetting the loss of Russian supplies. Strong possibilities exist for U.S. crude exports to increase further, as Washington could enact so-called secondary sanctions with the backing of Europe. Through secondary sanctions, the United States could target nations that still do business with Russia.

Which energy companies will win?

Upstream players with exploration and production activities on the Gulf Coast may benefit. We have selected three key energy players operating in the Gulf of Mexico in the United States. All companies carry a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the deep waters of the American Gulf, BP plc is one of the main oil producers. The main operating centers where BP pursues its investment and exploration activities are Atlantis, Mad Dog, Na Kika and Thunder Horse.

Over the past 60 days, BP has witnessed upward revisions to earnings estimates for 2022.

With the discovery of oil on the Baldpate field more than 25 years ago, Hess Company is one of the active players in exploration and production in the Gulf of Mexico (Offshore United States). In the first quarter of this year, Hess’ net production from the Gulf of Mexico was 30,000 barrels of oil equivalent per day.

For 2022, Hess is expected to experience earnings growth of over 309%.

In the US Gulf of Mexico, Shell currently operates nine deepwater production hubs. Two recent start-up projects in the Shell region are the Stones deepwater project and Appomattox, a deepwater oil and gas project.

For 2022, Shell is expected to experience earnings growth of over 104%.