U.S. Oil Supply: Canada Soars As Middle East Tanks

This GIF Shows Where the U.S. Imports Oil From in the Past 15 Years and U.S. oil supply

Why is Canada getting so fat, and how come Saudi Arabia is shrinking? It’s oil, baby. Not baby oil, mind you, but good old petroleum: this is a time lapse map of U.S. foreign oil imports – and it clearly shows how, over the last 15 years, America has been turning away from traditional oil suppliers in the Middle East to more trusted sources, closer to home.

This little GIF is about more than economics, it’s also about world politics. For it’s oil that makes the world go round, at least until we figure out how to mainstream wind, solar and other alternative power sources.

Few will still deny that America’s war in Iraq, so costly in blood and treasure, was at least partially about securing access to that country’s vast hydrocarbon reserves. And it may not be a coincidence that many of the world’s other major conflict zones are in the vicinity of pipelines and under the shadow of drilling jacks. That’s why there’s a broad consensus among all presidential candidates to reduce America’s dependence on foreign oil. If you don’t hear them go on about it, that’s not just because they agree; also because so much has already been achieved over the past eight years.

Fracking and other technological advances in oil extraction have spectacularly reversed the decline of America’s domestic oil production. Between 1970 and 2008, U.S. crude oil production fell by nearly half to 5 million barrels per day. It has since rebounded to close to 9 million. America now leads the world in oil production.

At the same time, petroleum consumption in the U.S. has gone down – it is now lower than in 1997, despite the fact that the economy has grown by almost 50% since then. Both factors explain why America now is in a much stronger position on foreign oil imports than, say, 15 years ago. In other words: it’s a buyer’s market. That’s why gas is so cheap at the pump.

But total energy independence is still a long way off. Yes, in 2015, the U.S. imported 1.5 billion barrels of oil less than in 2005. But imports still only covered half of the total consumption, 7 billion barrels. So while America is less at the mercy of foreign oil, petroleum will remain a strategically important commodity for the foreseeable future. Foreign oil import statistics will remain the tea leaves of geopolitics.

Let’s break it down. These four maps, resizing countries for the amount of crude oil and oil products the U.S. imports from them, shows the sources of foreign oil in 2000, 2005, 2010 and 2015 – the evolution also hinting at what the future might bring.

In 2000, the Middle East is the most prominent source of foreign oil, with Saudi Arabia America’s #1 regional provider. Kuwait and Iraq – under embargo, but able to trade under the UN-sponsored Oil-for-Food programme – are the two other main sources in the region. Combined, these three provide over $900M (VALUE?) in crude oil and oil products.

That is more than any other region… except North America: Canada is America’s #1 provider and Mexico the #4. If you’ve not been aware of that, it’s because both are friendly neighbours. Not so with provider #3, Venezuela: the South American country’s leftist policies and rhetoric have often led to verbal clashes with the U.S., in stark contrast to both countries’ petroleum interdependence.

Africa counts only one major oil-producing country, Nigeria (with Angola a decent second), while Colombia, the UK and Norway are the only other countries topping $100M. All others have very small extraction industries, or refine crude oil into something more practical (Belgium doesn’t have any oil fields).

Five years later, in 2005, we’re well into the post-9/11 world. Even though America’s overall oil imports are still rising (from 4.2 billion barrels in 2000 to 5 billion in 2005), imports from the Middle-Eastern Big Three have fallen, to $846M. The U.S. is hedging its bets, by importing more from everywhere else.

Imports from Canada and Mexico have risen from $1,164M to $1,403M. Imports from Venezuela have stalled, but that may be a reflection of the country’s internal troubles as much as a reluctance to buy from the Chavez regime.

Africa is becoming an important source of oil for America: both Algeria and Nigeria are supplying almost $100M more than five years before, and Angola has added over $60M – combined, more than the amount the U.S. gets from Iraq. Even Russia is now an important U.S. oil supplier, delivering $125M more than in 2000.

By 2010, the world has changed again. The Great Recession is in full swing. America’s oil imports have taken a dive, from 5 billion barrels in 2005 to 4.3 billion. The Middle East’s contribution to U.S. oil imports takes a significant hit. The Big Three supply just under $625M, roughly a quarter less than five years earlier. Most other suppliers see their exports to the U.S. decline vis à vis 2005: Mexico loses almost $140M, Nigeria, Norway and the UK each just over $50M, Angola $29M. Venezuela, most spectacularly, loses just under $200M.

But the shrinkage is not across the board. Some exporters lose, others gain. A lot. Russia adds $73M. Canada sees its oil exports to the U.S. surge with $129M. As the old Chinese saying goes: Crises are opportunities. And this one has ‘strategic realignment’ written all over it.

Oh, Canada! Lifted on the same technological surge that led to the fracking boom in the U.S., America’s northern neighbour has added almost $450M worth of oil exports to its southern neighbour in the last five years alone.

From an energy security perspective, Canada is now double as important to U.S. oil supply as the Middle East. Its relative importance is all the greater for the fact that America’s oil imports have continued to decline: from 4.3 billion barrels in 2010 to 3.4 billion in 2015.

With Canada’s share ballooning even while overall imports decline, it stands to reason that other suppliers suffer even more. That seems eminently true for Africa, which seemed on its way to become a strategic energy partner for the U.S.; but imports from Nigeria, Angola and Algeria have collapsed. Even Mexico’s contribution to U.S. oil consumption has taken a significant hit. The rest of Latin America – not just Venezuela, but also Colombia, Ecuador and Brazil – maintains a status quo.

Until we manage to power our homes, offices and factories with wind, sun and wave technology – and until we all drive electric cars – oil will continue to be the lifeblood of the economy. But we won’t have to wait that long to see a major shift in global energy politics. It is happening right now. America is reducing its dependence on foreign oil, and shifting what needs remain from the Middle East to geopolitically less explosive sources closer to home.