Oil Should Be Cheaper in U.S. (Even If It's Higher Everywhere Else)



The United States is the world's top producer of oil. Yes, you read that correctly. According to the EIA (US Energy Information Administration), the U.S. produces about 18.8 million barrels of oil per day, that is 20% of the world's oil production. The next closest producer is Saudi Arabia at 10.84 million barrels per day, which is 11% of the world's oil production. Here's the kicker: The U.S. is also the world's largest consumer of oil. We consume 20.54 million barrels per day. Therefore, we need an extra 1.74 million barrels of oil per day to break even.


TOP 10 OIL PRODUCERS

eai.gov / 2021 Oil Production Chart

TOP 10 OIL CONSUMERS

eai.gov / 2019 Oil Consumption Chart

Matt Moody - NYT / Keystone Pipeline

KEYSTONE PIPELINE

Have you ever heard of the Keystone XL Pipeline? This was a 2,151 mile pipeline that transported Canadian Crude oil into the Midwest. Three phases were completed and operational. A fourth phase was proposed in 2015, but the U.S. government denied the permits necessary to complete the last phase. Upon completion, the pipeline would have delivered 1.1 million barrels of oil per day, getting our country mighty close to the 1.74 million per day we lack. But on January 20, 2021 President Joe Biden revoked the Trump Era permit for the Keystone XL Pipeline.


RECORD BREAKING PRICES

Oil prices are higher than ever. For perspective, on Inauguration Day (January 20, 2021) oil was $53.24 per barrel. Today, oil sits more than double, approximately $120+ per barrel in the U.S.


Many things have changed since January of 2021. There is a massive baby formula shortage, inflation is nearing all-time highs, companies can't find employees willing to work, and there's a war between Russia and Ukraine. One begins to wonder... why?


While the U.S. economy is showing signs of a potential recession, it is common practice to blame most of our problems on the Russia/Ukraine Conflict. Especially the problem of high oil prices. Here is a common meme we see floating around:


But, that begs the question.."Just because oil is high everywhere else, does it have to be in the U.S.?" The answer is no, because the U.S. is the world's top producer of oil and we have the means necessary to be completely energy independent.


THERE IS POWER IN QUESTIONS

So, next time you hear people blaming our high oil prices solely on Vladimir Putin and greedy oil companies, ask yourself these questions:

  • "Why were we dependent on Russian oil in the first place?"

  • "Are we actively doing anything here at home to give Americans relief at the pump, or are we just blaming everyone else?"

  • "Did oil companies just now start getting greedy with profits?"

  • "Did Vladimir Putin just now become aggressive on the world stage?"

And the biggest question:

  • "Why would people who hate oil want to make it affordable for everyday Americans?"