http://news.yahoo.com/first-gas-other-fuels-top-us-export-200739553.html
Fellow capitalists, please help me. If we export 900 million barrels of oil and import 800 million barrels of oil, it seems to me that we should just forego the importing altogether. What scheme or actual reason is in place to have this happen? Obviously we produce enough oil to take care of our needs here. So why bother getting it elsewhere?
We export more than we import. So why do we import at all?
Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel[/quote]
America is still the world's largest importer of crude oil.[/quote]
So, america has a lot of refinement capacity it would seem.
Also, while it *should* be obvious 'crude oil' and 'fuel oil' are not the same thing, 'crude oil' and 'crude oil' or hardly created equal either.
To expand on what Eelco said, there's a large variety of different oil "grades". So even if the numbers reflected just plain crude oil, there would still be reasons to ship back and forth. US does a lot of high level refining as well, things like gasoline and jet fuel.
Monetary System. The US government/economy is mostly concerned with gaining a monetary gain out of... pretty much everything.
Monetary System. The US government/economy is mostly concerned with gaining a monetary gain out of... pretty much everything.
Yeah, you rarely hear of anyone operating a refinery as a charity. It sounds like a splendid idea though; whats keeping you?
[quote name='ZogJhones' timestamp='1325352213' post='4898488']
Monetary System. The US government/economy is mostly concerned with gaining a monetary gain out of... pretty much everything.
Yeah, you rarely hear of anyone operating a refinery as a charity. It sounds like a splendid idea though; whats keeping you?
[/quote]
College.
The United States has alot of very sophisticated refineries, but very little oil fields to get the crude oil that needs to be refined.
if we can sell at a high price and buy at a low price we make profit.
Read about arbitrage
Read about arbitrage
if we can sell at a high price and buy at a low price we make profit.
Read about arbitrage
That's pretty much it. Simple economics, which apply to most products, not just oil.
Oil sold to a domestic market is normally cheaper than oil exported abroad. For example, Gulf Keystone Petroleum quote on their website:
How much does Gulf Keystone get paid for its crude sold on the domestic market?
[color=#FFFFFF][font=Arial, Helvetica, sans-serif]
As a very rough rule of thumb, the domestic oil price in the Kurdistan Region of Iraq is generally 50% or more below the international price for oil, i.e. approximately $30-40 per barrel.[/font]
The same may be true in the US - those producing oil may be able to get a better price by selling it abroad than by selling it domestically.
Also, bear in mind different operating costs and oil quality across different oil fields. Oil produced from a land based field in Saudi Arabia will be cheaper to produce than from a deep ocean well in the Gulf Of Mexico.
There are therefore many reasons why you may wish to buy oil from abroad and import it, then export your own oil.
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