last six years, net oil imports have fallen by 33% to average 8.4 million
barrels per day (Mb/d) in 2011. This represents 45% of domestic
consumption, down from 60% in 2005. Oil is a critical resource for the
U.S. economy, but despite policy makers’ longstanding concern, U.S. oil imports
had generally increased for decades until peaking in 2005. Since then, the
economic downturn and higher oil prices were a drag on oil consumption,
while price-driven private investment and policy helped increase domestic
supply of oil and oil alternatives. Net imports are gross imports minus
exports. The decline in net imports has manifested itself as a decrease in gross
imports and an increase in exports of petroleum products.
Gross U.S. imports of crude oil and petroleum products averaged 11.4 Mb/d in
2011, down 17% since 2005. More than a third of gross imports came from
Canada and Mexico in 2011. About 40% came from members of the Organization
for the Petroleum Exporting Countries (OPEC), mostly from OPEC members
outside the Persian Gulf. Regionally, the largest share of U.S. imports
come into the Gulf Coast region, which holds about half of U.S. refining
capacity and sends petroleum products to other parts of the country and
abroad. All regions of the country import more crude than refined products
except for the East Coast, where petroleum products imports may rise further
due to refinery closures.
U.S. oil exports, made up almost entirely of petroleum products, averaged 2.9
Mb/d in 2011. This is up from export of 1.2 Mb/d in 2005, led by growing
export of distillates (diesel and related fuels) and gasoline. More than
60% of U.S. exports went to countries in the Western Hemisphere, particularly
to countries such as Mexico and Canada from which the U.S. imports crude oil. Exports
occur largely as a result of commercial decisions by oil market participants
which reflect current oil market conditions as well as past investment in
As a result, net oil imports fell from a peak of 12.5 Mb/d in 2005 to 8.4 Mb/d
in 2011, their lowest level since 1995. A consensus is generally emerging
among energy analysts that U.S. oil imports may be past their peak,
reached in 2005. Imports as a share of consumption are expected to fall
further, to less than 40% after 2020 driven by tighter fuel economy standards
and increased domestic supply.
Despite the decline in net import volumes, the cost of net imports has
increased due to rising oil prices. The aggregate national cost of oil
imports is a function of the volume of oil imported and the price of that
oil. The United States spent about $327 billion on net oil imports in 2011.
Being a net importer of a particular good is not necessarily negative for
an economy, but greater national oil import dependence can amplify the
negative economic impacts of oil price increases.
Oil import and export developments pose a host of policy issues. Concerns about
import dependence continue to generate interest in policy options to
directly discourage imports or to reduce the need for imports by
increasing domestic supply and decreasing demand. Rising exports at a time
of rising prices has led to calls for policies to restrict such trade. The
debate around the Keystone XL pipeline involves concerns about imports,
exports, and the environment. The rising cost for fuels has led to calls
for release of the Strategic Petroleum Reserve, meant to provide a short
term policy option in case of supply disruptions. Policy options may entail
various economic, fiscal, and environmental trade-offs.
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny
Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American
Express, or Discover card number, expiration date, and name on the card.
Indicate whether you want e-mail or postal delivery. Phone orders are preferred
and receive priority processing.