“Why does the US import so much oil when they are the world’s largest exporter of it?”

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I keep hearing over and over that the US imports all of its gasoline and raw petroleum that it used, however when you look at the numbers its the greatest exporter of oil ever. Wouldn’t it make more sense for the US to just take some that they produce and keep it to sell to its own consumers.

In: Economics

43 Answers

Anonymous 0 Comments

Imagine something like trees. Trees could be turned into other materials like wood or paper, and those materials could be further transformed into products like furniture, paper plates, etc. Not every country has the ability to make those useful things, so the US takes the raw material and turns it into more usable products. Oil works the same, the raw material collected isn’t immediately useful to countries without the ability to turn it into something else, so they buy from countries (like us) who have this ability.

So why do we buy other countries raw oil and not just use our own oil? First, buying a barrel of oil from someone else could be cheaper than extracting our own on a given day based on price per barrel. Second, there’s only so much oil in the world, and the US uses a lot ourselves. So the more of our oil we save, the less other people could use our need for oil against us – e.g. banding together and refusing to sell to us.

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