Exxon Mobil Corp. is courting refiners with rare long-term U.S. crude export deals, according to people familiar with the matter, as the company expands its trading scope.
A report by Bloomberg on Thursday said the oil giant has approached several refiners to discuss contracts for exports of light, sweet crude from the prolific Permian Basin starting as early as this year, said the people, who asked not to be identified because the discussions are private. The talks are in early stages, with volumes, timing and price still to be determined.
Long-term contracts, which involve the sale of cargoes of a certain quality, volume and price over a set period from as little as six months to multiple years, for U.S. oil are uncommon, with the sector still in its early innings after a decades-long export ban was lifted in late 2015. Rather, most deals are done on a spot basis, depending on the relative cost of American supplies versus cargoes from the Middle East and Asia.
The move is a next step for the Irving, Texas-based oil major as it seeks to capitalize on its extensive global network of oil production and refineries. In recent months, the firm has hired senior traders and analysts to expand its operations beyond just selling its own crude and refined products and into proprietary trading, seeking to boost performance that has lagged its competitors.
Exxon’s move to secure potential customers comes at a time when Chinese buyers such as Sinopec have delayed purchases of U.S. oil due to the escalating tariff conflict.
The company first focused on waterborne cargoes, according to people familiar with the matter, to take advantage of its strong position in the Permian and access to pipelines and storage. Exxon said earlier this year it wanted to triple production by 2025. The company has also been exporting at least double the amount of crude it moved last year, people familiar with the matter said in June.