The purpose of this project was two-fold: 1) assessing the impact of increased US crude oil exports on the global oil markets; and 2) cross-checking Thomson Reuters’ proprietary database (hereinafter “EIKON data”) with third-party sources, namely EIA and government databases of importing countries. The primary users of Thomson Reuters’ data, ranging from trading houses to big oil companies, have increasingly relied on the company’s proprietary information to understand the consequences of regulatory changes in US crude oil exports, especially after the lift of the export ban in 2015. This widespread interest stems largely from the fact that this policy change, along with the technical advancements of the shale revolution, has allowed the US to gain significant market shares in the global oil trade.
As such, Thomson Reuters asked the Capstone team to use the EIKON data to compartmentalize the varied impacts of increased US crude exports. More specifically, Thomson Reuters requested that the team analyze the changes in the composition of imports at the port level, identifying notable shifts in market share. Accordingly, the team selected key countries and ports in Europe and Asia, taking note of any regional differences in the impact of increased US exports.
The Capstone team successfully identified the above- mentioned shifts in various ports, including Rotterdam which currently imports 80% more US crude oil than it did in 2015. Simultaneously, they examined the robustness of EIKON data as a predictor of global oil flows. The Capstone team found that Thomson Reuters’ EIKON terminal has proven to be a promising resource, with models based on its proprietary data continuing to increase their predictive power. While several factors, like weekly volatility in the oil markets, may pose some obstacles for EIKON-based regression models, a combination of methods—namely a regression based on weekly changes and simple moving averages—can provide a robust approach to assessing the future scope and impact of exports from the United States.