They say a picture is worth a thousand words. Today I’m going to change that to a thousand ships. That’s about how many there are out there carrying crude oil, bobbing lazily outside ports around the world.
So, let’s narrow that number and geography down to reality and focus on our island of North America.
Needless to say, or repeat, what has been observed or written on the imbalance of supply and demand of all petroleum-based products — there’s too much supply while demand has vacuumed.
The latter will come back as we see how global efforts to put a hammer lock on this pandemic works out. And out of the way is where politicians should be. Let the doctors be the doctors.
That ends the political segment of my show for today, folks.
Too much supply you say? You want proof you ask? Proof you shall get:
Between now and the May 24 Victoria/Memorial Day weekend, 28 tankers carrying 43 million barrels of crude are scheduled to deliver their cargoes to U.S. Gulf or West coast refineries. This will join up with 76 tankers already waiting to unload another 50 million barrels of the product. All this while refineries are barely ticking over at 73% capacity.
Are we being oblivious to the obvious, or is it just me?
The U.S. is the world’s largest crude oil and refined products producer. Canada and the U.S. together produce more crude than the combined volume of Russia and Saudi Arabia.
Why do we apparently enjoy being held economically hostage by these two, and other members of OPEC?
Why are there 93 million barrels of imported crude waiting to unload off U.S. coasts?
North of the border, eastern refiners import 500,000 bpd from the Saudis et al.
You go figure, because I can’t!
Why don’t we ban all imported crude from outside North America, and keep import and exports in place between the U.S., Canada, and Mexico?
Make North America a true crude oil pricing island with a structure that the Island determines together.
Forget all the mood swings and saber-rattling outside of our shores, and let them find their own sandbox!
But this would mean regulating pricing and objectors may say that the “Made in North America” pricing structure would mean higher prices for gasoline and diesel if crude prices, not in our control, but driven as they are now by… “here today, maybe tomorrow, pick a number any number,” pricing protocols.
Sure, higher prices at the pump and loading rack would be inevitable as the costs of producing crude from the shale fields of the U.S. and oilsands reservoirs of Canada are without doubt significantly higher than getting the oil out of the ground in the Middle East.
Yes, the price differential is huge and in the Saudi’s favor, but have those lower production costs ever been passed on to the North American consumers?
Nope. Never have, and never will.
Will our economies live and die by decisions made outside of our borders and beyond our control?
Yep. Always have and always will.
It’s time to change before that ship has sailed, or many more ships sail to our shores.
~ The Grouch
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