Monday, February 25, 2013

Time For A New Poll: Are Crude Oil Imports From the Middle East to the US Increasing or Decreasing?

Since I am not ready for another poll so soon, here's the answer.


Financial Times is reporting:
The US was more reliant on the Middle East for its oil imports last year, underscoring the critical importance of the politically unstable region for the country despite the growing energy independence its shale gas revolution is bringing.
[R]ecent oil import trends from the Gulf region suggest why the US might continue to play a critical security role in the region. While domestic production increased the most in 150 years last year, Washington will confirm later this week that oil imports from the Gulf region continued to rise. By the end of November the US had already imported more than 450m barrels of crude from Saudi Arabia, more than it imported from Riyadh in the whole of 2009, 2010 or 2011, according to figures from the US energy department.
For the first time since 2003, Saudi imports accounted for more than 15 per cent of total US oil imports. The Gulf as a whole accounted for more than 25 per cent, a nine-year high. Other Gulf exporters are also seeing unusually strong US demand. By the end of November, Kuwait had shipped more oil to the US than in any year since 1998. Analysts are expecting annual figures to be released later this week to confirm the trend seen up to November. 
Oil produced in shale fields like the Bakken in North Dakota and the Eagle Ford in Texas is of a light high-quality variety. But Gulf oil is still vital for the US because many US refineries are set up to process heavier crude oils. So while imports of light crude from countries such as Nigeria have fallen dramatically, demand for Gulf crude has not.
The point of the article had to do with security concerns in the Mideast. The article did not mention the Keystone XL.

Perhaps it should have.  The dots are starting to connect. $60/bbl Canadian sands oil; $120/bbl OPEC oil. Analysts forecast the amount of oil the US imports from OPEC will increase.


  1. So do I understand this right ? Because the EPA and environmentalists have made it so hard to build new refineries we are stuck with old refineries that need the less environmentally friendly fuel from the gulf. So we still need to protect our interests there and need to send our soldiers into harm's way. Or are there products that can only be made using this heavier oil?

    1. You've brought up at least two points.

      1) Regarding heavy oil: Yes, you are correct. RBN Energy has discussed the difference between heavy oils, light oils, condensates, etc.

      But yes, heavy oil is critical.

      2) Regarding the EPA and faux environmentalists: despite the obstacles, US refiners converted "light oil" refineries to "heavy oil" refineries over the past two decades (at great expense) and that's why these refiners are not eager to change them back (at great expense). I think the EPA and faux environmentalists have less impact on this issue that market conditions (at least at the moment).

      A reader send me a link yesterday regarding upgrades at the Detroit Marathon oil refinery that was announced in 2010 (I believe): it was a $2.2 billion project. Not trivial.

  2. It looks like the increase of Saudi type oil could also be an indication of declining output of Venezuelan sour crude due to their messed up political environment.

    Truly unbelievable that there is an abundant supply of heavy crude a short distance away in Canada. A friendly trade partner and neighbor. Do you think this is an unintentional blind spot or is it due to something else? What ever the reason leadership is absent and leads to the big questions of what the heck is going on.

    1. Yes, there had to be an explanation why Saudi oil increased even as overall oil demand remained level or fell a bit. And falling Venezuelan imports would certainly explain it.

      How did it happen, you ask? Ideological? Blind spot? Intentional? Unintentional? It's hard to believe that the "best and brightest" would give into faux environmentalists in Nebraska (and the ones that flew in and bussed in) but one really has to wonder. I really don't know. I think it was a huge miscalculation.

      Maybe high oil price was the goal, which would have helped the solar and wind industry, but they were surprised by plummeting natural gas prices. The moratorium in the Gulf after the spill was way overdone, so perhaps the administration truly looking to decrease domestic oil production --> higher prices --> better for solar and wind.