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
Because someone is lying to you. The US dose not import gasoline, or refined petroleum products.
The US dose import about 6 million barrels of oil a day. While exporting about 3 million + 6 million of refined petroleum products like gasoline. The reason for the imports is because all oil is not the same. The oil that the US imports is heavy crude. Heavy crude is very hard to refine and requires a very advanced facility. So the US imports heavy crude and uses it’s advanced technology to make it into refined products, while it exports supper light crude, which can be refined with 1800s technology, to places that do not have the technology and infrastructure to refine heavy crude.
Whoever told you that is lying or just is stupid and doesn’t understand oil products.
America exports oil and many refined products. We have a very strong refinement industry.
Since we already have the refineries and ability to refine at a high level, we import other countries’ crude oil to refine it and resell.
The products at the end of the chain are worth more. But many countries just don’t have that expertise or refinery infrastructure. So other countries just sell crude to the US to make their bit of revenue, and the US takes that input and refines it into products to then export for larger profits.
We have crude oil type A we produce locally (type A is used for various products once refined). We have the infrastructure and refineries for that type and then use/export that finished product.
We import type B (and the refinded product of B) for use locally.
All crude oils aren’t the same, used for the same end products, nor undergo the same refinery.
Better explained and edited:
Because the US is a good place for oil Trading. Oil companies in the US like to buy up crude oil when the prices are low and sell it back when prices are high. We also have a lot of refineries for turning crude oil into various fuels so it makes sense to import crude and export refined.
Think of the US like a store. We have our own store brand but we also put goods from other companies on our shelves. You want to sell oil? Come to the US. You want to buy oil? Come to the US.
It does use what it produces. It also exports what it produces. Whoever you heard that from either misunderstands the situation or is reliant on outdated information.
1. The US has always imported a lot of crude oil to refine and export. Historically US refineries have had a lot of excess capacity which positioned it well to import crude and export refined products. This is a value-add industry since the refined products are more valuable than the crude.
2. The US at one time consumed more crude oil than it produced. That has not been true over the last decade or two. The idea that the US consumes more oil than it produces is left over from the high oil prices and shortages due to the OPEC oil embargo in the 70’s when that was true. US policy has focused on “energy independence” ever since.
3. The US is huge. It doesn’t make sense to ship oil from Alaska to the east coast to refine. As a result, the US tends to export crude from Alaska to Asia and imports crude from South America/Canada to the East coast.
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So basically oil isnt just oil, it has quality levels. Some oil is really easy to refine in to other products, some is really hard to refine.
Lets say youre a relatively poor country with a lot of oil but almost all of it is the really hard to refine type, you arent necessarily going to have the ability to refine it in your country. So when the US who has a ton of really good quality oil but also more capacity for refining the hard to refine stuff than its using comes to you and says “hey we will trade that unusable for you oil for some of the refined products” thats a pretty good deal for you. You get some value for oil that otherwise has none to you.
Meanwhile on the US side, because that hard to refine oil is useless to the nations we are buying it off of we can usually get it pretty cheap. It can actually be more beneficial for us to export some of the high quality oil we naturally produce that most other countries can use for a high price, import that low quality oil that few other countries can use for a low cost, and then refine that oil along with whatever of our oil we didnt sell crude and sell the finished products. Profit all around
The reason we import heavy crude is cause our refineries are optimized to refine a medium-ish mix. Refineries were built in a time when the US produced heavy and light crude. The fracking fields we have now produce light crude, but not a lot of heavy. Heavy is imported to mix with the light so we don’t have to build new refineries.
“We” don’t particularly import a lot of oil. There are facilities in the US that are able to refine and process oil. Much of the import number is barrels that must land on our shores in order for these companies to process the oil. So, they’re imports on paper, not in practice.
Refineries also are set up to run certain “slates” of crude. As others have mentioned there are different qualities, weights, and solids contents in various crudes. These refineries are designed to operate and run optimally for a given type. As such, their supply chain teams and engineers will bring in the correct types to be able to operate at peak efficiency and ensure the most margin on their products.
So it makes sense in this case to import middle eastern crudes, that tend to be heavier, into the gulf around Houston, Louisiana and to export much of the lighter/sweeter Permian Crude types to facilities that are more designed to handle that.
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