Daily Energy Report
US oil imports, Saudi and Russian cuts, Saudi Aramco OSPs, Climate target failures, LNG trading, US LNG vital to Europe, Russia defeats sanctions, Offshore wind blows, UK upstream development, and mor
Chart of the Day: US Oil Imports by Country
Figure (1) above shows the average US crude oil imports by country in the first eight months of 2023. About 60% of US crude oil imports come from Canada (3.85 mb/d). Only 12% come from the Arab world (0.787 mb/d).
EOA’s Main Takeaway
The US is heavily dependent on oil imports from Canada, a country that is adopting extreme climate change policies that might affect its oil production. Once the Trans Mountain Pipeline is operational and Canada is able (for the first time) to export oil directly to Asia, exports to the US will decline unless Canadian production increases by the same amount. This might explain the Biden administration’s pivot to Venezuela. The share of Venezuelan imports, 2% now, will increase significantly in the coming years.
The war in Gaza and higher oil prices in the early days of the war led to calls to reduce US dependence on Arab oil. While the percentage of imports from Arab countries is only 12%, energy security requires diversification of oil imports and lower dependence on Canada. In other words, the calls to reduce dependence on Arab oil are misguided. It is also ignorant since most of the oil goes to Motiva, a Saudi-owned refinery.
Almost all US crude imports are medium and heavy sour. The USA exports light sweet crude and condensates. Any increase in shale production must be exported.
Story of the Day
Bloomberg: Saudi, Russia Stick to Planned Oil Cuts
Saudi Arabia and Russia have committed to maintaining oil supply cuts of more than 1 mb/d until year-end. Saudi Arabia will reassess its production strategy next month, considering whether to extend, deepen, or ease the cuts. Oil prices have been unstable, partly due to fears of the conflict between Israel and Hamas expanding, potentially involving Iran. The International Energy Agency notes that sustained high fuel prices could impact global inflation and economic stability, yet OPEC+ appears focused on tight supply control.