Canada’s next

Oil Imports

Chuck Simmins has the latest numbers for US oil imports. Notice where two-thirds of our oil DOESN’T come from. I’m constantly surprised at how so many people think that almost all of our oil comes from the Middle East. It just ain’t so.

However, the Middle East still does have a disproportionate effect on our economy because if the price of Middle East crude goes up, crude everywhere goes up.

And, while on the subject, the answer to the “Why haven’t we done anything about Saudi Arabia?” crowd is “See number two on this list.” Their time may be coming, but we’re going to give them every chance to come around. And even if they don’t we need time to prepare for the oil shock that will shake the world if something big happens in the Land of the Two Holy Places.


  1. It’s a little more complicated than that. Demand, primarily driven by China (importing 99% of its oil needs), then Japan and India, has exceeded supply in various ways at various times lately. The mix of easily refinable crude and crude that needs a lot of processing is changing, with the Saudis at the expensive end of the pipe. In addition, and I cannot recall the source, the amount of money you have to put up to speculate on the oil futures market is the lowest, by far, of any of the commodity markets. That encourages rampant speculation. I’d guess (WAG) that much of the drop from $55 a barrel was the speculators getting out. And, you can be swimming in crude but it does you no good if you don’t have refinery capacity. No one is building them in the States or in much of old Europe.

  2. Absolutely it’s more complicated than that. I only want to qualify my comments by noting that just because our dependence on Middle Eastern oil isn’t as great as most people seem to think it doesn’t mean that all is well and good. As you point out, China in particular is a huge consumer of oil. If the Middle East output is cut by violence or if prices go up for some other reason, China still needs to get it’s oil somewhere. If the demand for non-ME oil goes up from those currently getting most of their oil from the ME, prices will rise for non-ME oil. This, in turn, will affect the US economy in a negative way. That’s all. (And don’t even start on the refining capacity issue. If there’s one little place in my heart that I have sympathy for the oil companies, it’s in that area. They, of course, like to blame environmentalists and government regulations. I’m willing to believe that, but I’m sure there’s a lot more to it than just that.)

  3. Chuck: Well, er, that’s why I wrote ‘However, the Middle East still does have a disproportionate effect on our economy because if the price of Middle East crude goes up, crude everywhere goes up.’ Yes, I used the word ‘dependence’ when maybe a different word may have been clearer, but everything I wrote in my post and in my comment agree just about completely with your comment.

  4. But its the implication of your post, not any particular fact, that I disagree with. You are implying that Middle East oil isn’t as big a deal as people think. ‘Notice where most of our oil DOESN’T come from.’ This implies that somehow people are overemphasizing the importance of Middle Eastern oil. What most people discuss when talking about Middle Eastern oil is our ‘reliance’ or ‘dependence’ on it, not how much of it we actually import. The Middle East doesn’t have a ‘disproportionate effect’, they are the effect. Saudi Arabia is the only oil producer that has significant excess capacity. That means they are the only oil producer in a position to add supply to the market to bring down prices. (All the other OPEC producers cheat and produce at full capacity. Everyone else just produces at full capacity all the time.) The region as a whole produces 33% of the world’s crude, and most of them are members of OPEC. Like it or not, a few Middle Eastern states reign absolute over the world’s oil markets (U.S. import sources notwithstanding).

  5. Chuck: Maybe I’m just totally missing something, but you are arguing that an implication you see in one sentence outweighs the entire post and the context that the sentence exists in. My post clearly says that ME oil strongly affects the US economy and the price of oil outside the ME. My comment to you (‘Chuck’ as opposed to the unaddressed one to Chuck Simmins) admitted that ‘dependence’ may not have been the best word to use. My post notes the percentages of our oil providers and notes that many people would be surprised by the numbers. I’m not talking about ‘What most people discuss when talking about Middle Eastern oil is our ‘reliance’ or ‘dependence’ on it’ as you wrote. I’m talking about the people I ask ‘What percentage of US oil do you think comes from the Middle East?’ Most of them answer in the neighborhood of 75% or more. After noting the numbers I clearly write ME oil has a disproportionate effect on our economy. (It IS ‘disproportionate’ because the effect ME oil has is greater than the amount of ME oil the US imports.) I fail to see what you’re point is, other than to agree with what I wrote. I don’t think we disagree, other than maybe on the exact, hair-splitting meaning of the word dependence in this usage. Even then, your main point is not different than mine unless I totally misread you. And your first comment seems to be gone. I may have inadvertently deleted it while clearing spam. I’ll restore it if I can.