Monday, January 25, 2016

Koch Brothers increasing US dependence on Arab oil!

Reuters --

Several oil-trading sources have said that U.S. refiner Koch may have fixed a tanker to ship 2 million barrels of Omani crude to the U.S. Gulf Coast. The company declined to comment. The shipment would be the United States' first crude imports from Oman since 2013, according to data from the Energy Information Administration (EIA). "Maybe Koch can take it into its own system, but refiners there are not too keen on the grade. Basrah Heavy is much better," said Adi Imsirovic, a member of the Surrey University Energy Economics Centre, referring to the Iraqi grade.

The logic is complicated; essentially all the yelling and screaming about the urgent need to allow American crude oil to be exported has in fact created an incentive to import oil because of the price differentials. It goes to show how oil market policy is especially unsuited to sloganeering.

Incidentally, the fact that the domestic oil industry faces more competition when export restrictions are lifted is, in an obtuse way, why Ted Cruz is an American and not a Canadian. That was part of the 1970s tradeoff between living in Texas or Alberta.

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