THE CRUDE OIL MARKET
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and product within Canada, from Canada into the United States,
and within the United States. Pipelines are also an important oil
transport mode in mainland Europe, although the system is much
smaller, matching the shorter distances.
As already noted, the United States is the major importer of crude
oil and accounts for approximately 25% of total world imports of
crude oil. Yet its import dependency, the percentage of demand
met by imports, is significantly lower, at about 50% than that of its
international partners. Industrialized countries such as Japan and
Germany have import dependency levels of 90 to 100%.
Canada is the one country that delivers oil to the United States
by pipeline because the majority of crude oil in Canada is landlocked and rely almost exclusively on pipelines from Western
Canada that tie into the transcontinental pipeline network to reach
their main export markets, which lie all across the Northern Tier of
the United States.
The trade among regions of the United States is focused on the
eastern half of the country. The Gulf Coast is by far the largest supplier, accounting for more than 80% of the flow in the Petroleum
Administration for Defense Districts (PADD). In contrast, the
Rockies and the West Coast are isolated, in petroleum logistics
terms, from the rest of the country. The relatively easy flow of petroleum from the Gulf Coast to the Midwest and the East Coast mean
that incremental supply is more readily available to those markets
in the event of a demand surge or supply drop.
7.2 Global Oil Consumption
Determining oil consumption presents an interesting problem. The
size and complexity of the market and the number of consumers
and suppliers make data collection a daunting task and a variety of
approaches are necessary in order to measure (or, at best, estimate)
consumption of crude oil. In addition, because of the variations
in climate and topography within the United States (also including Alaska and Hawaii), regional markets exhibit different oil
consumption patterns. Population and regional economic activity
are two important determinants, but the traditional availability of
alternative fuels, petroleum transportation, geography, and a host
of other factors are also important.
199
and product within Canada, from Canada into the United States,
and within the United States. Pipelines are also an important oil
transport mode in mainland Europe, although the system is much
smaller, matching the shorter distances.
As already noted, the United States is the major importer of crude
oil and accounts for approximately 25% of total world imports of
crude oil. Yet its import dependency, the percentage of demand
met by imports, is significantly lower, at about 50% than that of its
international partners. Industrialized countries such as Japan and
Germany have import dependency levels of 90 to 100%.
Canada is the one country that delivers oil to the United States
by pipeline because the majority of crude oil in Canada is landlocked and rely almost exclusively on pipelines from Western
Canada that tie into the transcontinental pipeline network to reach
their main export markets, which lie all across the Northern Tier of
the United States.
The trade among regions of the United States is focused on the
eastern half of the country. The Gulf Coast is by far the largest supplier, accounting for more than 80% of the flow in the Petroleum
Administration for Defense Districts (PADD). In contrast, the
Rockies and the West Coast are isolated, in petroleum logistics
terms, from the rest of the country. The relatively easy flow of petroleum from the Gulf Coast to the Midwest and the East Coast mean
that incremental supply is more readily available to those markets
in the event of a demand surge or supply drop.
7.2 Global Oil Consumption
Determining oil consumption presents an interesting problem. The
size and complexity of the market and the number of consumers
and suppliers make data collection a daunting task and a variety of
approaches are necessary in order to measure (or, at best, estimate)
consumption of crude oil. In addition, because of the variations
in climate and topography within the United States (also including Alaska and Hawaii), regional markets exhibit different oil
consumption patterns. Population and regional economic activity
are two important determinants, but the traditional availability of
alternative fuels, petroleum transportation, geography, and a host
of other factors are also important.