Daily Energy Report
US crude imports by country of origin, Russia’s oil exports and revenues, Russian Black Sea port of Taman, China’s oil imports, carbon capture technology, Italy’s hydropower, and more
CHART OF THE DAY: US Oil Imports Are Mostly from the Americas!
Figure (1) above shows that most of the US crude oil imports are sourced from the Americas, with more than 60% of total imports originating from Canada. Canadian crude has replaced oil from the Middle East, with imports reaching record highs. It also shows how direct flows of crude oil from Russia to the US came to a full halt when US President Biden banned such imports last year.
EOA’s Main Takeaway:
The US is not an energy-independent country even if it is a net exporter of oil (crude and oil products) . The US exports light sweet crude and imports heavy sour crude.
The shale revolution enabled US refiners to replace light crude imports, especially from Algeria, Libya, and Nigeria with domestic production of this type of crude. Such a change in trade did not only reduce imports as shown in Figure (1) above, but also prevented imports from increasing to 13 million barrels per day (mb/d) as was predicted before the shale revolution. In other words, the shale revolution reduced imports by about 7 mb/d.
As oil production in Canada increased, the US changed the main source of its imports from the Middle East to Canada. However, dependence on Canada has increased in recent years mainly when former US President Donald Trump banned crude oil imports from Venezuela in 2018.
Below are the key questions that need to be considered:
What will happen to US imports from Canada once the Trans-Mountain pipeline is completed and Canada starts exporting oil from the West to Asia?
Will the US lift sanctions on Venezuela? And what will the political ramifications look like?
Will the US import more crude oil from Brazil and Guyana?
Will Saudi Arabia and Iraq fill the gap?
What is the impact of the above scenarios on price differentials?
One fact politicians ignore is that even if the US doesn’t import any crude oil from the Middle East, political events in the region will have an impact on the US in one way or another. The oil market is fungible— when oil prices increase, they increase everywhere.
Furthermore, if US imports from the Middle East are low, why did the Biden Administration then ask Saudi Arabia and its Gulf allies to increase production in summer 2021 when oil prices were high?
STORY OF THE DAY
The president of the UN Climate Change Conference COP28 has called for utilizing commercially viable CO2 capture technology to end fossil fuels emissions, Carbon Herald reported.
“In a pragmatic, just, and well-managed energy transition, we must be laser-focused on phasing out fossil fuel emissions, while phasing up viable, affordable zero-carbon alternatives,” Sultan Al Jaber was quoted as saying on May 2 during the Petersberg Climate Dialogue in Germany.