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Charles Hugh Smith

Charles Hugh Smith

Charles Hugh Smith has been an independent journalist for 22 years. His weblog, www.oftwominds.com, draws two million visits a year with unique analyses of global…

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America’s Role in the Global Oil Market

America’s Role in the Global Oil Market

It's pretty easy to sum up America's role in the global market for oil: We need it, they got it. Here are the numbers, via the U.S. Energy Information Administration for 2009 (last year data available).

U.S. oil consumption: 18.8 million barrels per day (MBD)

U.S. oil production: crude oil: 5.36 MBD; all oil (including liquids from natural gas, etc.): 9.14 MBD. 48.6% of consumption

Oil exporters sell us: 9.67 MBD 51.4% of consumption

Where we get the oil from (top 15 suppliers to the U.S.)

World oil production: 85.5 MBD

World oil consumption: 85.6 MBD

Percentage U.S. consumption of global total: 22%

Interesting statistical note: many commentators use the total consumption of 18.8 million barrels per day and the 5.35 MBD of crude oil production to then conclude the U.S. only supplies some 28.5% of its oil consumption. This is not true; including other liquid oil supplies drawn from natural gas wells, etc., the U.S. still produces about half of the oil it consumes. The U.S. remains the Number Three producer of oil, just behind Russia and Saudi Arabia. The U.S. produces roughly the same amount of oil as Canada, Mexico and the United Arab Emirates combined (numbers 6,7 and 8 in the list of top oil producers). The U.S. is also far and away the world's top consumer of oil. (China may consume more energy, but much of this is coal, not oil.)

Oil, like all commodities, is priced on the margin, meaning that a relatively small imbalance between demand and supply can produce large swings in price. What would happen if oil supplies were reduced by 1 million barrels day? Or 5 MBD? Who wouldn't get their previous allotment? How much would the winning bidders have to pay per barrel?

Those are questions that the market may have to answer if turmoil in the Mideast and North Africa seriously disrupt global oil exports.

By. Charles Hugh Smith

Charles Hugh Smith has been an independent journalist for 22 years. His weblog, www.oftwominds.com, draws two million visits a year with unique analyses of global finance, stocks and political economy. He has written six novels and Weblogs & New Media: Marketing in Crisis and just released Survival+: Structuring Prosperity for Yourself and the Nation.




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  • Anonymous on March 01 2011 said:
    Just what the doctor ordered. I'm sure that I have made a mistake where the numbers in this informative article are concerned. And I'm not the only one to make a mistake. Many thanks author.There is of course a question: does the US import oil products, and if so how much?
  • Anonymous on March 04 2011 said:
    THE UNITED STATES HAS MILLIONS BARRELLS OF CRUDE OIL IN SOUTH DAKOTA, NORTH DAKOTA AND OTHER STATES THAT WOULD LAST UNTILL THE YEAR 2041 LESS THAN A 1000 FT. UNDER GROUND, PROBABLY PROTECTED BY PLAY GROUND BULLING OF ENVIRONMENT CONTROLERS:)UNREAL TO THE U. S. PEOPLE

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