Trump made the claim repeatedly during his campaign, saying he would secure U.S. energy independence from “our foes and the oil cartels,” while simultaneously creating “complete American energy independence.”
Khalid Al-Falih, Saudi Arabia’s oil minister and chairman of Aramco, fired back this week, saying “at his heart President-elect Trump will see the benefits [of Saudi oil imports] and I think the oil industry will also be advising him accordingly that blocking trade in any product is not healthy.”
Al-Falih also said that Saudi Arabia is eagerly awaiting the Trump presidency, as his campain boasted “50,000 feet announcements” that are likely to change once he takes office.
Yet despite the importance Saudi Arabia plays in the U.S. oil supply, most of the 7 to 10 million barrels of petroleum imported each day come from our closest ally and nearest neighbor, Canada. Canadian oil exports to the U.S. reached their highest level to date of 3.4 million barrels per day in January 2016, according to the U.S. Energy Information Administration (EIA).
The most recent statistics suggests that roughly 1.1 million barrels per day are imported from Saudi Arabia, making it the second biggest importer of oil to the U.S.
Last year, the U.S. imported approximately 9.5 million barrels of petroleum per day from about 88 different countries. Petroleum includes crude oil, natural gas plant liquids, liquefied refinery gases, refined petroleum products such as gasoline and diesel fuel, and biofuels including ethanol and biodiesel.
America’s demand for oil has fallen in recent years, due mainly to a rise in domestic hydraulic fracking projects in states like North Dakota, Texas and Colorado.
“We needed oil desperately years ago,” Trump said during his campaign. “Today, because of new technologies…there’s a tremendous glut on the market.”
In the past, the Organization of Petroleum Exporting Countries (OPEC) would help ease such a supply glut by producing less. However, OPEC has been reluctant to decrease output over fears of relinquishing market share to the U.S. In fact, the organization has actually ramped up production.
For its part, Saudi Arabia has been hit hard by the recent downturn in crude prices. As oil plummeted from $115/barrel during the summer of 2014 to the current mid $40s range, the country has recorded massive budget deficits of $98 billion last year and an estimated $87 billion for this year.
Slumping profits are also forcing Saudi Arabia to impose unpopular austerity measures, with little end in sight until OPEC can agree on a substantive oil production cut. Members of the organization are scheduled to meet Nov. 30 to finalize a deal to curb output.
Source: Forbes