During the last year I have been writing articles about Middle East and Saudi oil, and the strait of Hormuz. California has been 15% dependent on Saudi oil, and may be affected by the recent oil field and refinery fires caused by drones attacks in Saudi Arabia. The Houthi forces in Yemen claim responsibility.
Update 9/16: The administration says that, instead, the 19 drones or cruise missiles came from the Northwest in Iran. The Iranian government denies this. The US is 5% dependent on Saudi Oil. The Saudis have 200 million barrels stored in Europe and Asia.
Do we have a mutual defense pact with Saudi Arabia? Does the Senate know about this? Is there a legal basis for action against Iran for this strike that Trump is hinting at? The United States no longer owns any of Aramco, the Saudi oil company. The Saudi government is a Kingdom, the House of Saud, not a democracy. It has created a humanitarian crises in Yemen for 12 million, and killed 100,000 there.
Roughly, 100 million barrels of oil are used per day worldwide. Aramco said that 5.7 million Saudi barrels per day out of their 10 million barrels per day have been put out of commission. That is 5-6% of world production. The Saudi’s say that it will takes weeks to get back on line.
The US petroleum reserve is now filled to 645 million barrels, with 250 million barrels of sweet oil and 395 million barrels of sour oil. Sweet oil has less than 0.5% sulfur and sour greater than that. Both can be made into gasoline and diesel, but sour requires sulfur filtering and is more expensive to refine. The reserve is located in Texas and Louisiana, but I don’t know if there are pipelines to California.
The Abqaiq facility that was hit in Saudi Arabia processes sour oil into sweet oil, which is called stabilization for shipment.
Since the US uses about 20 million barrels per day, the 5% Saudi oil share is 1 million barrels per day. The present reserve level could last the US for 1.8 years, if needed. Oil is fungible, and if we can pay more for it, we will get what we want. I remember when the US lowered the speed limit to 55 in 1973-74 when there was an OPEC Arab country oil embargo of the US. If people had to, we could just slow down to the present speed limits or stop aggressive accelerations, and easily save 5%.
Here are the links to the previous articles.