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
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[EIA.gov](https://www.eia.gov/totalenergy/data/monthly/#petroleum)
The US produces crude oil that is easy to refine. Because it is easy to refine, that makes it more expensive.
Other countries produce crude oil that is more difficult to refine. Because it is difficult to refine, that makes it cheaper.
The US refining infrastructure is better set up to refine the cheap, difficult crude oil.
The US buys cheap crude and refines it and sells the more expensive crude to other countries.
There is no 1 single oil.
Oil has many different grades and types. The light oil the US gets from fracking in Texas gas is light and produce a high percentage of gasoline and diesel, but that’s pretty much all it’s good for.
Heavy oil has produces less gasoline and diesel but it’s other components can be used to make asphalt, plastics and other petroleum products. We get this heavy oil from many different countries but mostly Canada.
Secondly, moving oil across the land is more expensive than oversea and moving oil from Texas to west and east coast had to be by train due to Jones law that forbid foreign ships from domestic trade routes (and the US doesnt have rnough domestic tanker ships). O&G Businesses end up selling their oil overseas and refineries also buy them from other foreign countries. We export and import oil simultaneously.
Because the oil isn’t where it needs to be.
Pipeline infrastructure construction has basically been frozen since Bush left office, which means that to get Oil from Texas to California or New England you have to export it internationally, and then re-import it to regional ports.
That’s why gasoline costs $2.83 in Texas and $4.57 in California.
New England has some aging pipeline infrastructure but it’s insufficient for modern demand. That’s why Heating Oil regionally troughs down to about $2.50 a gallon in summer and peaks at $4-5 in Winter.
In addition to the reasons mentioned, there’s also a level of control as well.
The US imports oil, which forces certain countries to have an economic reliance on the US. This gives the US more negotiating power.
Then they export oil as well because of the excess they have. But why make more oil than needed? National security. If geopolitics go sour and they stop selling oil, the US still has enough production capacity to keep itself going. This again, removes the power other countries have over the US.
Then there’s a 3rd benefit. By controlling so much import and export of oil, they effectively give themselves power to control the oil price. If OPEC tries to pull the same shit again like they did a decade ago with oil prices, the US can slam the hammer down on them.
America is the centre of the world’s oil produciton and oil CONSUMPTION. And up until 2008 America was a net importer of oil….. meaning that they. As soon as Americans discovered the middle east had oil the world’s wealthiest man was creating oil tankers to transport it.
And then 2008 hit. America had successfully diversified its energy sources enough and reduced its fuel costs via Bush era vehicle manufacturing laws that now America was over supply.
So now America imports raw crude and exports diesel, gas and plastics.
My moment to shine: 😁
US is not the world’s largest exporter, although it does export a lot (around 4 million barrels per day). I see no comments with numbers. Also go to Www.EIA.gov. Hear it from the horse’s mouth. 🙂 Numbers: Let’s talk numbers: Crude oil (in million barrels per day MBPD): World production: 90mbpd US production: 12 MBPD (Saudi Arabian is at 11) US consumption: 20MBPD (Saudi Arabia is at 4) US needs a net import of 8 million BPD. SA has a net export of 7 million BPD. Now US exports around 4. So it ends up importing more than 8. Why export? Not all crude oils are same. US sells the one it doesn’t want (sweet one) but buys the one it can process ( the sour kind).
A lot of it is that there are different types of oil.
In ELI 5 terms, imagine the US makes peanut oil but imports olive oil. We have more peanut oil than we need, so we sell it. And we don’t make any olive oil, so we buy it.
Sure, they’re both “oil”, but they’re different kinds.
There’s other nuances to this too, but at its most simplified version, that’s the best explanation.
I have an apple farm. I make red delicious apples. My wife likes to make apple pie. Apple pie is terrible if made with red delicious apples, I need granny apples.
So I am an apple farmer that exports apples yet I am at the store buying apples
Research the different types of oil and which refineries are built to process the different types of oil. There is alot of mis information out there.
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