Oil - Oil Imports And Exports

Around the world there are inequities between those countries that use petroleum and those that possess it. Countries with surpluses (Saudi Arabia, for example) sell their excess to others that need more than they can produce (the United States, China, Japan, and western European countries). Petroleum is sold as crude oil or as refined products. World trade has been moving toward refined products, as the petroleum-exporting countries have realized that they can make a greater profit from refined oil products than from crude oil.

Though the United States produces a significant amount of petroleum, it has been importing oil since World War II (1939–45). This reflects the gradual exhaustion of reserves in the United States and the growing energy demand caused by population growth and economic expansion. Initially, the relatively low price of foreign oil encouraged U.S. dependence on it. American industry and economic life have been built on oil's cheap availability. But the price of foreign oil has gone up, and OPEC controls its availability.

Relatively low crude oil prices and the resulting reduced domestic oil production are the major causes of an increase in imports since 1985. From a low total net import (imports minus exports) of 4.3 million barrels per day in 1985, oil net imports increased to 11.2 million barrels per day by 2003. (See Table 2.2.) In 1985 imported oil supplied only 27.3% of American oil consumption. Just five years later, in 1990, the proportion had risen to 42%, and by 2003 it was 56.1% as demand continued to grow. (See

FIGURE 2.6

FIGURE 2.7

Figure 1.6 in Chapter 1.) According to the Energy Information Administration's Annual Energy Review 2003, the leading suppliers of petroleum to the United States in 2003 were, from most to least, Canada, Saudi Arabia, Mexico, Venezuela, Nigeria, Iraq, United Kingdom, and Norway.