Good news, you say? Maybe. The forces moving oil around the world are complex, and in addition to recession-related decline in oil consumption in the US (mostly in diesel and jet fuel, not so much in gasoline), Saudi Arabia is shifting its market more toward China. This matters, because as exporters find markets willing to pay higher prices, those prices will increase in the United States as well, even if we are buying less. And as exporters begin to care less about the economic stability of their lower-demand customers, what the U.S. says about the question becomes increasingly irrelevant.
Believe it or not, Saudi Arabia has had a vested interest in keeping oil prices low enough to keep the economic engine of the U.S. purring. Gouging is not in their interest—contented, spending customers are. When other customers supply most of the money any exporter needs, those who are lower on the totem pole become second-rate, at least as far as price concerns go.
For the record, here are the top import sources for U.S. oil in November 2009:
- Canada – 23% of imports
- Mexico – 9.8%
- Nigeria – 8.8%
- Venezuela – 8%
- Saudi Arabia – 7.7%
The next tier of import sources vary from month to month, but each of the following nations supplies the U.S. with about 3% to 4% of our oil imports: Angola, Iraq, Algeria, and Russia.
Virtually every drop of Canadian oil exported comes to the United States. So don’t think we can simply “get more” from Canada. There is no more to give, except as Canadian supplies slowly grow. With prices as low as they are ($78 or so per barrel), the Canadian Tar Sands are barely economic, or non-economic, to produce. Which means they are not produced.