U.S. crude oil output is now closing in on 9.5 million b/d, the highest levels in two years and almost double what we were producing a decade ago. But, while our demand has basically been flat, oil is a global commodity and imports have long been ingrained in our own market, so we still import about 35-50% of the oil that we use. Imports though have been falling, yet probably not as much as some energy security advocates want. Overall, China has surpassed the U.S. this year to become the world’s largest crude importer, soaring to 9.2 million b/d in March.
Especially since we export so much oil now (as I document here), the need to import lots of oil might be confusing to some. Yet, the need to import amid very high output is a matter of logistics, where pipelines, contracts, varying refinery configurations, costs, and numerous other considerations come into play: “Why importing and exporting oil makes sense.” Trade is a foundational principle of our economy, and oil is the world’s most traded commodity, interestingly above coffee (here).
Ultimately, these complex and dynamic realities of the oil import and export markets help keep our prices lower. And low cost energy is drastically underrated: consumer spending is 75% of U.S. GDP, so cheaper energy enables more discretionary spending and thus economic growth.