theinvisibleheart
New member
According to US DOE's EIA(Energy Informationa Administration) website listed below,
http://www.eia.doe.gov/pub/oil_gas/...ons/company_level_imports/current/import.html
top 5 countries are in order of decreasing export to US:
...NATION.............K Barrel(s)/day Dec 2007 stat
1. CANADA............1,780
2. SAUDI ARABIA.....1,675
3. VENEZUELA.........1,246
4. MEXICO..............1,234
5. NIGERIA..............1,210
Couple of interesting point:
1. as you can see, Iraq doesn't even make the top 5 list of oil exporters to US.
2. combined oil import from Canada, Venezuela, Mexico, and Nigeria far outweighs the import qty from Saudi Arabia(the sole Middle Eastern country in the top 5 list)
3. the real effect of Middle Eastern oil is in the price of oil, primarily sweet crude rather than sour crude, in the world market. So even if we imported zero oil from Middle East, if there is political instability in the region, the price of oil (even domestically produced one) will go up. This is because in the case of commodity like oil with standardized exchange and futures market, the value of the asset is not based on what you paid for but what it will sell for.
If I'm a gas station owner and know that the price of oil went up in the futures market, I would need to charge more since in order to replenish the underground gas tank, I would need to pay more. Forward rate is the best economic predictor of future rate.
4. there are number of untapped oil spots in the world. The problem is the cost of extraction and processing makes it economically unviable unless the price of oil in the world market goes up.
If the price of oil(sweet) in the world market goes up, these untapped oil spots will most probably be exploited (unless more cost effective alternative(non-oil) energy resource gets developed first).
As you can, the odds of unlimited price climb in the price of sweet crude oil is unfounded(the supply of sour crude which requires more processing is greater than sweet crude).
We can probably not import any oil directly from Middle East but we can't be isolated from the price effect of sweet crude in the world commodity(oil) market due to turmoil in the Middle East.
In the long run, long before any resources become exhausted, cheaper, more efficient alternative gets developed (e.g. whale oil/oil lamp being replaced by electric bulb, horse buggy being replaced by gas driven automobile, etc.).
The very process of sweet crude being priced higher in the world market makes it more economically attractive to develop more untapped oil spots and also develop alternative source of energy.
http://www.eia.doe.gov/pub/oil_gas/...ons/company_level_imports/current/import.html
top 5 countries are in order of decreasing export to US:
...NATION.............K Barrel(s)/day Dec 2007 stat
1. CANADA............1,780
2. SAUDI ARABIA.....1,675
3. VENEZUELA.........1,246
4. MEXICO..............1,234
5. NIGERIA..............1,210
Couple of interesting point:
1. as you can see, Iraq doesn't even make the top 5 list of oil exporters to US.
2. combined oil import from Canada, Venezuela, Mexico, and Nigeria far outweighs the import qty from Saudi Arabia(the sole Middle Eastern country in the top 5 list)
3. the real effect of Middle Eastern oil is in the price of oil, primarily sweet crude rather than sour crude, in the world market. So even if we imported zero oil from Middle East, if there is political instability in the region, the price of oil (even domestically produced one) will go up. This is because in the case of commodity like oil with standardized exchange and futures market, the value of the asset is not based on what you paid for but what it will sell for.
If I'm a gas station owner and know that the price of oil went up in the futures market, I would need to charge more since in order to replenish the underground gas tank, I would need to pay more. Forward rate is the best economic predictor of future rate.
4. there are number of untapped oil spots in the world. The problem is the cost of extraction and processing makes it economically unviable unless the price of oil in the world market goes up.
If the price of oil(sweet) in the world market goes up, these untapped oil spots will most probably be exploited (unless more cost effective alternative(non-oil) energy resource gets developed first).
As you can, the odds of unlimited price climb in the price of sweet crude oil is unfounded(the supply of sour crude which requires more processing is greater than sweet crude).
We can probably not import any oil directly from Middle East but we can't be isolated from the price effect of sweet crude in the world commodity(oil) market due to turmoil in the Middle East.
In the long run, long before any resources become exhausted, cheaper, more efficient alternative gets developed (e.g. whale oil/oil lamp being replaced by electric bulb, horse buggy being replaced by gas driven automobile, etc.).
The very process of sweet crude being priced higher in the world market makes it more economically attractive to develop more untapped oil spots and also develop alternative source of energy.
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