Yes for total petroleum products, no for crude oil. Also iirc we can’t refine our own oil because refineries are tooled for heavy sour crude and not the domestically produced light sweet crude.
Not exactly. Back in the 80s, the refineries switched over to processing the cheap and “bad” stuff (heavy, sour) into the same products you could easily make with the expensive and “good” stuff (light, sweet). The cost of the “bad” crude is much lower than the domestically produced crude, but the process to turn it into gasoline is more “expensive” based on the infrastructure investment which has already been built.
The US hasn’t built a new refinery in almost 50 years iirc. The lead time to reconfigure refineries to process domestically produced light sweet crude would involve shutting down the refineries and rebuilding over a period of about 5 years.
The US isn’t willing to stop refining oil for half a decade, plus of course infrastructure projects in the US always take far longer and cost far more than initially anticipated, assuming they ever get completed.
Most of the heavy, sour crude oil the US refines comes from Venezuela, the Gulf of Mexico, and Alberta.
a critical piece i’ve come to understand this year is that processing fuel into diesel (aka No. 2 Fuel Oil) is a bit of a bottleneck globally. so in the current landscape, US capital formations control a lot of that capacity for processing but the demand for that capacity exceeds global supply.
a lot of heavy equipment and transport logistics rely heavily on diesel, as does agriculture. so aside from places that have been pivoting to electrification for this sort of heavy machinery, the demand pressure for strategic use is strong. like not so much Bozo Chungus in his Ford F350, but CSX and Norfolk Southern and other logistics companies that more or less funnel materials and consumer goods into the bottomless maws of america. so capital formations all over are bidding up that diesel refining capacity and continue to drive diesel prices higher and higher because simply not enough of it is being created. china and the US are by far the most dominant countries in terms of capacity for refining diesel and certainly china is/will deploy this strategically. the US will allow it to be controlled by the highest bidder.
theoretically, the US government could try to reserve that capacity for the domestic market only (especially logistics, agriculture, and heating) as some kind of national security/stabilization act but it would go against the most empowered formations under Trump who are making a killing right now (and likely induce some kind of existential resistance strategy that they must have planned for) also, it would be absolutely brutal for europe and much of the world.
Isn’t the US a net exporter?
Yes for total petroleum products, no for crude oil. Also iirc we can’t refine our own oil because refineries are tooled for heavy sour crude and not the domestically produced light sweet crude.
Can’t or won’t. I think processing sour crude is just more economic for the US.
Not exactly. Back in the 80s, the refineries switched over to processing the cheap and “bad” stuff (heavy, sour) into the same products you could easily make with the expensive and “good” stuff (light, sweet). The cost of the “bad” crude is much lower than the domestically produced crude, but the process to turn it into gasoline is more “expensive” based on the infrastructure investment which has already been built.
The US hasn’t built a new refinery in almost 50 years iirc. The lead time to reconfigure refineries to process domestically produced light sweet crude would involve shutting down the refineries and rebuilding over a period of about 5 years.
The US isn’t willing to stop refining oil for half a decade, plus of course infrastructure projects in the US always take far longer and cost far more than initially anticipated, assuming they ever get completed.
Most of the heavy, sour crude oil the US refines comes from Venezuela, the Gulf of Mexico, and Alberta.
a critical piece i’ve come to understand this year is that processing fuel into diesel (aka No. 2 Fuel Oil) is a bit of a bottleneck globally. so in the current landscape, US capital formations control a lot of that capacity for processing but the demand for that capacity exceeds global supply.
a lot of heavy equipment and transport logistics rely heavily on diesel, as does agriculture. so aside from places that have been pivoting to electrification for this sort of heavy machinery, the demand pressure for strategic use is strong. like not so much Bozo Chungus in his Ford F350, but CSX and Norfolk Southern and other logistics companies that more or less funnel materials and consumer goods into the bottomless maws of america. so capital formations all over are bidding up that diesel refining capacity and continue to drive diesel prices higher and higher because simply not enough of it is being created. china and the US are by far the most dominant countries in terms of capacity for refining diesel and certainly china is/will deploy this strategically. the US will allow it to be controlled by the highest bidder.
theoretically, the US government could try to reserve that capacity for the domestic market only (especially logistics, agriculture, and heating) as some kind of national security/stabilization act but it would go against the most empowered formations under Trump who are making a killing right now (and likely induce some kind of existential resistance strategy that they must have planned for) also, it would be absolutely brutal for europe and much of the world.