Why can’t we just use our oil?

A quick and uncomplicated answer to the question of why the U.S. imports oil despite record domestic production: It’s primarily because of a mismatch between local oil quality and refinery infrastructure. U.S. shale oil is mostly "light/sweet," while many U.S. refineries, particularly on the Gulf Coast, are designed to process "heavy/sour" imported crude. Additionally, global market dynamics, transportation costs, and high export profits make it more economical to sell domestic crude abroad and import specific heavy crude needed to efficiently produce gasoline and diesel. While the U.S. is a top oil producer and a net exporter of refined products, the industry runs on a global trade model rather than solely relying on its own raw production.

John Days
Senior Analyst
CNIC