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
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.
as others have said it’s not the same oil. we could just use our own and import none but that’s giving up an economic advantage.
our own oil is more expensive to produce than foreign oil. so we can sell ours at a profit, and buy different oil for cheaper since other places don’t have the means to use the cheaper oil as others have said.
if it made economic sense to be a net exporter, we would be.
EDIT: should say petroluem, not oil.
There’s many different grades of oil (Light Sweet -> Heavy Sour), depending on what sort of impurities are in it. However, it all needs to be refined to actually get the petroleum products you want like gasoline or diesel, and the refinery infrastructure is different for each grade.
The US built a lot of its refinery infrastructure to deal with heavy crude, because that was what was widely available on the market at the time. However, the shale oil produced from the fracking boom generally produces light sweet crude, which the US doesn’t have the infrastructure to refine.
So you could either spend millions or billions of dollars rejiggering your refinery to handle light crude instead of heavy, or you could just export the Light crude on the open market and import the Heavy crude that you are already set up to handle.
That’s why the US is a _net_ exporter, it imports some oil, but it exports a lot more.
The global oil market is complicated, and the average person doesn’t understand it. That’s why it is used by sleazy politicians as a divisive issue to blame their opposition for the price of fuel. The lie that the president controls gas prices has been very successful. Remember the “I did that” Joe Biden stickers that were all over the gas pumps?
Isn’t it the other way round?
I thought they import oil, and export petrol.
the first step to understanding is to know that not all crude oil is the same. the crude from Saudi is typically heavier (more long chain carbons) and sour (presence of hydrogen sulfide). the crude from the US is typically lighter (more short chain carbons) and sweet (not as much hydrogen sulfide).
our refineries were designed to process the heavy crude from places like Saudi bc they were built back in the day where our domestic crude oil production was minimal and we actually imported most of our crude oil. Since that time, the US upstream side of O&G has boomed (eg fracking) and the US now produces a ton of light crude oil (called West Texas crude). however, bc some refineries run most cost efficiently when processing heavy crude, operating companies will opt to import the heavy crude and export the light crude. by processing heavy crude, the refinery can run more oil per day and easily covers the cost of exporting and importing.
the other side of the issue is what product is most needed in the US. while gasoline is the face of O&G consumerism, it’s actually diesel that dominates the US market. you can extract more diesel out of heavier crude by virtue of diesel being heavier than gasoline. so that means the refineries can make even more money that way
There are different oils, from light and sweet to heavy sour. The US has some of the best refineries for the heavy crude that is usually found overseas, so we import it, refine it, and ship a lot of the resulting products out. Since we import it, it’s counted as crude oil import, but we are a net exporter of petroleum products.
Fuel, I.e. gasoline, diesel, jet fuel, heavy fuel oil. Has been in the top 5 category of exports for over 20 years. We import oil, export fuel.
Oil is not all the same. Our refineries are all set up to use a particular type of oil, and we ran out of that type of oil in this country decades ago. The oil we’re extracting now is different and requires different processes to refine it. It would take investments in the billions or maybe even trillions of dollars to revamp our refineries to use it. So we export it to countries that already have refineries that can use it and import oil that we can use with our existing refineries.
Most countries in the world that can refine oil can only refine light sweet crude (short hydrocarbon chain, low sulfur content). Since demand for this type of oil is high, it’s more expensive than heavy sour crude.
The US is one of only a handful of countries capable of refining the heavy sour stuff, so they can buy it at a reduced price, refine it, then either use it or sell it off.
Tangent; this is one of the reasons Venezuela’s economy is in such rough shape. They have a ton of oil, but it’s the undesirable heavy sour oil so they can’t sell it to many nations. The US would gladly buy it, but Chavez and Maduro kept going out of their way to antagonize what should’ve been their biggest trading partner
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