The top five exporters of crude oil to the United States are Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria. In August 2010 they constituted 63 percent of all imports to the United States. Four of these five countries have problems that could affect U.S. oil imports. Canada is the only country with long-term social and economic stability and large proven reserves (an estimated 179 billion barrels in 2007). This post summarizes Saudi Arabian oil export dependability issues. Subsequent posts discuss the other top oil exporting countries and business development issues.
Despite its large oil production, 90 percent of Saudi Arabia’s oil production comes from only five fields and up to 60 percent of its production stems from the Ghawar field. These giant, aging oil fields were discovered in 1941 to 1965.1 The Saudis may have irretrievably damaged some of their oil fields by over pumping salt water into them to maintain production. No external auditing of their oil fields is permitted by the Saudis. The turmoil spreading throughout the Middle East has not impacted Saudi Arabia yet. That situation, however, could change quickly. If that happens, what is the United States’ plan?
1 Giant Oil Fields of the World, Presentation, AIM Industrial Day, May 23, 2005, Fredrik Robelius