U.S. Oil Imports at Risk and at Odds with Obama Goal

One of the objectives of the Obama administration’s energy policy is to reduce the dependency of the United States on imported oil. This has been a goal of virtually every previous administration starting with President Nixon in 1972. For most of this time, oil imports have grown as U.S. domestic oil production declined and oil consumption steadily rose. The average of the four weeks ending June 12th, the United States imported about 12.0 million barrels a day (b/d) of crude oil and refined product out of estimated daily demand of about 21.4 million b/d of consumption. Total imports represent about 56% of the total oil demand in this country. Our total demand estimate includes the volume of refined product exported from the U.S. since it demonstrates our total exposure to imports.

The latest data on crude oil and refined product imports by country is through March 2009. That month’s data shows a total import volume of 12.5 million b/d with Canada being our leading supplier with 2.4 million b/d, Mexico second at 1.2 million b/d, Venezuela third at 1.1 million b/d, Saudi Arabia fourth at 1.0 million b/d and Nigeria fifth at 0.9 million b/d. The interesting thing is that these top five countries have remained in our top five suppliers since at least 2000.

As we look at these five countries we are drawn to the point that at least three of them have serious long-term supply challenges that could result in their not being able to sustain their current exports to the U.S. That could mean the U.S. will become more dependent on other foreign suppliers or welcome increased volumes from our two most solid suppliers – Canada and Saudi Arabia. Each of these countries present policy issues that the Obama administration needs to deal with. But first let’s look at the supply challenges of the other three top suppliers.

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