In hydrocarbon markets with significant excess supply beyond local demand, exports play a key balancing role by keeping production out of storage, reducing overhangs and expanding access to new consuming markets. Selling, not storing, U.S. petroleum keeps the domestic industry humming and the national economy working. However, we expect the U.S. market will have to withstand an unbearably slow trickle of crude oil exports out of the country.

In 2014 and 2015, U.S. producers were lucky to have the ability to export processed condensates and crudes to nations beyond Canada. And last December, the U.S. repealed the decades-long distortion that was the crude oil export prohibition. That means, theoretically, that crude exports are now possible. But practically, we don’t see them as voluminously probable for years given our current price forecasts. And the market seems to agree since there are only a few tankers leaving U.S. shores laden with crude oil.

EIA data show U.S. exports of crude and condensates have grown to a respectable range of 300 to 500 Mbbl/d. But looking forward, we believe exports will be rangebound as U.S. exporters fight to “maintain share” like the other crude exporting firms and nations of the world. We expect the U.S. to remain a deep net importer.

At an average export rate of 404 Mbbl/d over 2014 and 2015, 280 MMbbl of U.S. light crude and condensate were kept out of storage caverns or tanks. Instead, those barrels were sent to the global market.

So why are we not as excited as some observers about the prospects of crude oil exports?

Firstly, we think that Canada’s imports of U.S. light crude for that nation’s eastern refineries continue to make sense. That gives U.S. exports a solid floor of several hundred thousand barrels per day.

But we believe offshore exports of U.S. light crude will be heavily challenged by economics.

On a per-barrel basis, it takes several dollars in transaction costs to load, tank and offload crude oil from one place to another. About $3/bbl is a good bogey. We hear port costs are coming down, but not far enough given our forward global crude oil price forecasts.

For all of 2016, we see Brent priced at a discount to WTI of about 5 cents/bbl. Averaged for 2017, we model a barrel of Brent as having an 80-cent premium. That is to say, we don’t see spreads wide enough to induce high-volume economic export flows anytime soon. The price is just not right.

The highly publicized shipments of boutique tanker loads of U.S. condensate and light crude to diverse nations seem to be occurring one at a time rather than under long-term supply arrangements. Buyers are likely seeking to improve their supply diversity and manage crude supply risk, while testing logistics, crude quality and yield in their refineries before moving to higher volume purchases from the U.S.

EIA data shows the U.S. has relied on imports for between 6 and 10 MMbbl/d of its crude diet. By far, most imported barrels into the U.S. were in the heavy and intermediate quality range. Taken as a whole, the U.S. will likely remain a net crude importing nation.

Limited exports will not remake the U.S into a net crude exporter.

Light crude is a different story. Only 660 Mbbl/d of 2015 crude imports were in the light crude quality range. On the export side, the U.S. moved 563 Mbbl/d of crude and condensate in January 2016. So if U.S. light crude exports gain more than imports over the reigning low price environment, we believe it is entirely possible that the U.S. could become a net exporter of light crude.

Given these factors, we expect relatively slow growth in crude exports despite the lifting of the export ban. But we think the potential for the U.S. to become a net exporter of light crude makes this rather heavy and downbeat likelihood a little more bearable.