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    [OC] Why does the U.S. appear to import crude more cheaply than other major economies?
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    [OC] Why does the U.S. appear to import crude more cheaply than other major economies?


    Source: World Bank WITS, HS 270900 crude oil imports.

    I estimated average import cost per barrel from annual import value and quantity:
    USD/barrel ≈ import value ÷ estimated barrels

    Conversion used:
    kg → metric tons → barrels, assuming 7.3 barrels per metric ton.

    This is an import unit-value estimate, not the exact negotiated purchase price. It can vary due to crude grade, shipping, supplier mix, and contract structure.

    UK has missing WITS quantity fields in some years, so those points are left blank.

    Posted by someonestoic

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    24 Comments

    2. bojun on

      I’m guessing it’s the overhead of dealing with conversion rates to and from the petrodollar – of which I believe the US is exempt.

    3. Tomas2891 on

      Doesn’t the US one of the few countries that can refine really crappy crude oil like Venezuala’s? Maybe that’s it

    4. tubbis9001 on

      The US has better refinery tech. They can purchase lower quality stuff and still make a good product out of it. They export a lot of oil too, selling it to countries that don’t have the same tech they do.

    6. tomrlutong on

      Maybe something to do that most of our imports come from nearby Canada and Mexico?

    7. According_Setting303 on

      Because we import it from Canada and Mexico to help boost their economies since you don’t want neighbors with bad economies- as well for other reasons I’m sure such as influence. They provide the majority of our crude oil imports.

      edit: why is this getting downvoted? I answered OPs question

      also u/derpmaddness, you ok dude? Kinda lame to send me some comment flaming me (with your own strawman) and then delete it

    8. bubba-yo on

      The US is well known for being able to refine really shitty oil – like Canada tar sands. So the reason the US imports crude, despite ‘drill baby drilling’ enough domestically, and also is the worlds largest exporter of refined petroleum is that we will import cheap low-grade oil from counties that lack the capacity to refine it, and export high quality domestic oil to countries that can refine that stuff.

      So what you’re seeing is the US soaking up shitty oil that nobody wants, for cheap, and exporting high quality oil at top prices. When politicians talk about the US needing energy independence, don’t believe them. We have it, and then some. We export loads of the stuff.

    9. Broad-Kangaroo-2267 on

      Canada. Domestic policies have made it difficult/expensive to build out additional capacity for oil to reach the coast for overseas markets but the infrastructure exists to ship it to Gulf Coast refineries in the USA. A lot of it from Alberta is heavy crude (oil/tarsands) and the Gulf Coast refineries are set up to process it.

    10. plumberdan2 on

      They got us Canadians over a barrel…

      We have built a lot of pipeline infrastructure that only goes to the US. With no other customer we have essentially created a monopsony for ourselves and pay the price. Google wti-wcs spread to see the discount

    11. Supergamera on

      Much of our buying is Heavy Canadian which hits the border via pipeline at (more or less) $11/bbl under WTI, while much of the rest of the world is buying light crude delivered by ship at (more or less) $4-5/bbl over WTI.

    12. Drewy99 on

      Because Canada sells it at a discount to the US. Most of the imported oil comes from Canada.

    13. im_thatoneguy on

      If you’re Japan everything has to be shipped in on oil tankers.
      If you’re the US, you can just open the pipeline tap from Canada.

      Mexican Oil > Western US: $82-$88
      Mexican Oil > Japan : $130

      Also, we buy a lot of the crappy oil that nobody else wants/is able to refine. For example right now

      Saudi Oil is around $125/gallon
      Canadian Albertan oil is $90/gallon.

      [Oil Price Charts | Oilprice.com](https://oilprice.com/oil-price-charts/)

      So, there are very low transport costs and it’s also just a cheaper product. THe US also produces so much oil that we can just pick and choose when it makes sense to import.

    14. ToddBradley on

      How come none of the comments are about the representation of the data (the purpose of this sub), and instead we have five people commenting with the same answer to the clickbait title question?

    16. off_by_two on

      Because of Canada.

      Canada is a captive market, they have lacked the infrastructure for decades to get their crude oil to a major oil port in quantities big enough to change the economics of what they can sell oil at. The US has been a massive beneficient of this imbalance, so we buy it from Canada under the market price because of it.

      TLDR Canada only has one real buyer: the US. That means Canadian companies get screwed a bit on their selling price

    17. ketamarine on

      Canada.

      We sell them our oil at a steep discount due to transportation costs being prohibitive to get it to global markets.

      And it’s … difficult… to get oil piplines built in developed countries in the 21st century…

    18. Curmudgeonadjacent on

      U.S. exports its light sweet crude, which is the most expensive on the global market b/c it’s cheap/easy to refine.
      U.S. then imports the cheaper heavy oil that’s harder/more expensive to refine at U.S. refineries. U.S. refineries are not built for the oil produced in the U.S.
      It’s a stupid, “greed above logic” way of managing petroleum production.

    19. MoreGaghPlease on

      This is just mix.

      Canadian oil trades at about $10-15 dollar discount to the price of crude oil in the US. The refineries that take dilbit and SCO (the semi-upgraded product that gets shipped out of Canada) are mostly in New Orleans or the US Midwest.

    21. Annh1234 on

      US gets allot of oil from Canada. And Canada can sell the oil to the US with a pipeline, or magically cross Antarctica to sell it to Russia? 

      Basically it’s really easy for Canada to sell oil to the US , and very hard to sell it everywhere else. So US buys it under market value, since it’s too expensive to move it, and it would end up over market value wherever it might be needed.

    22. mazzicc on

      I find it interesting that people mention that Canada has really crappy quality oil, but not the refining capacity to process it.

      I always thought the US capabilities were more around our space and ability to sprawl massive refining operations, which Canada should have as well.

      Has Canada chosen not to build this capacity because there’s not really any advantage of it being next to the US, or is there some other reason the US is special for this refinement?

      Even the common explanations of having the technical know how seem to hold up a little less when you’re a bordering country and it wouldn’t be that outrageous to hire American companies to build the refining capabilities next door.

    24. Mayor__Defacto on

      The US has refineries uniquely set up to process Heavy Sour crude. This generally trades at a discount and is more difficult to process.

      However, if you have a massive petrochemical sector, it can be immensely profitable to import the crude others find to be too difficult to deal with, process, and export finished products.

      Other economies are not either willing or able to handle poor quality inputs and would rather pay a premium for an easy process.