Behold the list of America’s principal suppliers of imported oil. Behold the absence from that list of the world’s second largest crude oil producer : Russia. America buys substantially more oil from the United Kingdom than from Russia.
Why doesn’t America buy any significant amount of oil from Russia? Should we expect this ever to change?
I guess it has mostly historical reasons. The Russian oil industry grew to international importance during the Soviet era, and the Americans were not very keen on buying Soviet oil at that time, fearing to become too dependent on imports from the realm of evil. Besides, there was, and is, plenty of oil in the Americas, and combined with imports from Africa or Arabia, the American demand was met. When the Soviet Union collapsed and the new Russian oil industry emerged, there was no gap on the American oil market which the Russians could have bridged, so the situation continued.
Western Europe was less hesitant to buy Russian hydrocarbons - beginning in the 1970s, several major oil and gas pipelines for delivering Soviet oil to the Wesr were constructed. Then again, it was self-suggesting to do so, given the geographic proximity, and it went along with the spirit of détente during that era. Later on, Western Europe started tp expand its own offshore oil industry, which reduced the importance of imports from Russia.
Probably because it’s far easier for Russia to sell it to Europe.
Isn’t most of Russian oil exported via pipelines as opposed to tankers? You can’t export oil to the United States with a pipeline from Russia unless you’re going to build a pipeline from Russia across the Bering Strait into Alaska.
Also, Europe experiences supply problems due to friction between Ukraine and Russia. I think Russia has to prove it can be a reliable supplier that doesn’t get snippy over the political disagreement du jour.
Actually, it appears to me from table 2 on this EIA page that Russia exports more oil by sea than by pipeline. If I am reading the table right, Russia exports 1.26 million barrels a day by the Druzhba pipeline, but 1.255 million barrels a day goes through the Primorsk seaport at St. Petersburg, 985 thousand barrels a day go through Novorossiysk and other Black Sea ports. Another half million barrels a day or so gets exported by rail, interestingly.
Same page notes that Russian oil exports to America have doubled since 2004. So perhaps America will eventually get a significant amount of oil from Russia? Especially as Saudi reserves get tapped out and the Russians start exploiting the Barents, Kara, and East Siberian Seas?
Oil is largely fungible – it doesn’t really matter where you get it from, so you get it from places that will have the lowest importation costs. If you look at the list, our top suppliers are either geographically close (Canada, Mexico, Venezuela) or have mature and efficient distribution systems (Saudi Arabia). We don’t buy Russian oil because they’re far away and a relative newcomer to the major oil producers.
To a certain extent it dos not matter too much where it comes from, although the quality of the crude can impact where it is sent, some of the heavier crudes or sour crude can only be handeled at certain refinaries.
There will probably be in increase of imports to the US from Russia on the west coast, particularly as the Sakhalin island production ramps up.
Russia is not a relative new comer as a major exporter. Baku in Azerbaijan was a major oil production region in the later 1800 and early 1900, and apart from the East Indies, was one of the few areas of oil production outsde of the US. There was a great deal of grief caused to Standard oil et al, by the cheap exports from Russia to europe displacing the exports for the US into Europe.