UAE-based newspaper The National offers up a timely reminder that the the US doesn’t get most of its oil from the mideast, despite what our politicians would have you believe.
America is not nearly as “addicted” to Middle East oil as its politicians claim. In fact, there is only one Middle East producer – Saudi Arabia – in the top five source countries that account for two-thirds of US oil imports, and Saudi Arabia is not America’s No 1 source of petroleum imports. Not by a long shot. That distinction goes to Canada.
In 2007, only two Middle East oil producers made the Top 10 of US oil importing countries: Saudi Arabia and Iraq. Saudi Arabia came in at third, just ahead of Venezuela and behind Mexico and Canada. Iraq came in at eighth. Kuwait did not make the Top 10, at 13th. The UAE is not even on the list. It does not export a single drop of oil to the United States. Last year Kuwait slipped into the Top 10, making it three out of 10 from the Middle East.
Of course, it doesn’t matter too much. Oil is a fungible commodity on a global market. So if we somehow took 100% of the oil produced in Canada and Venezuela, another buyer somewhere else would have to buy more Mideast oil, and the effect would be the same.
But. Even though oil has declined sharply, we still hear a lot about how we can boost the economy by reducing our dependance on foreign oil and keep that cash in this country. But isn’t this just the same logic used for every single other protectionist claim? Sure, we could keep cash in this country by demanding that all cheap, plastic novelties be made in this country. And we could keep cash in this country by requiring Americans to only buy American cars. Somehow though, a lot of people who would find those proposals to be utter hogwash think it’s ok to apply that logic to oil. Why? If there’s a problem with getting so much energy from oil that’s one thing to argue, but where that oil comes from doesn’t matter.
Consider, say we replaced 25% of our oil consumption with solar energy, but it were way more expensive to produce, requiring more manpower and subsidies. Meanwhile, the rest of the world enjoyed cheap oil because we can cut back on our demand. Would we, in that situation, have a more competitive economy?
You see the same mental bias when we talk about debt. Somehow it’s ok to go into debt until the moment when you’re borrowing from… the Chinese! As though it’s tolerable to saddle future generations of taxpayers with trillions in debt payments, so long as it’s not debt payments to the Chinese. Debt is debt, and any borrowing will make our economy further leveraged. That’s the issue to be debated. If you’ve got a great investment, you don’t care where your borrowing from. If you blow the money on garbage, it doesn’t matter if we borrow from our close allies in Canada and the UK.
Bottom line: Don’t let anyone obfuscate arguments by throwing in countries of origin. Either a transaction makes sense or it doesn’t. The skin colour, national origin, or political bent of your counterparty is pretty much irrelevent.