Based on another discussion, I did some research and discovered something that I had heard of before, but never knew the details.
U.S. oil companies export roughly 8.5 million barrels of crude oil and refined fuel per day. That’s almost half the total daily U.S. consumption. If that oil/fuel was kept here for domestic use, what would that do to U.S. prices? It’s not that we don’t produce enough oil, it’s that U.S. companies are allowed to send it overseas. Additionally, you’ll hear lots of carping about the government not allowing U.S. companies to drill on federal land. Even ignoring that they’re currently exporting as much as they are, there are more than 9,000 drilling permits availability today on more than 12m acres of federal land.
So again, the issue isn’t the government, regardless of the party in power, but that the oil companies have found a very profitable model (see their quarterly reports) and they are sticking to it. In that sense, they’re not all that different from OPEC, controlling supply to maintain high prices.
Another post by someone who doesn't know the oil business!
I have 35 years in the oil and gas business. I worked for a major and some smaller companies in operations and engineering.
In the simplest terms:
Crude oil makeup is different depending what basin it comes from. Some crude oil is heavy in sulfur, some light in API gravity. Some crude oil is caustic, some is thin and almost like gasoline. Some is so thick, it has to be heated with steam to flow.
Refineries are designed to refine specific types and grades of crude oil. We haven't built a new refinery here in the US (of any large size) for decades. So what we have in refining capacity is based on crude supply basins decades old. And we have found new sources of crude oil in the last decade (North and South Dakota, some new areas in Texas, etc).
While refineries can be upgraded to run different grades of crude, it's very expensive and long term project work, and generally has marginal payback. Some of this has been done already.
We export crude to several countries, like Mexico which has an energy business that is falling apart. We import crude since some refineries can't process some of our grades of crude due to refineries not having the right configuration or the crude oil is 3,000 miles away.
We also export finished products like LNG, diesel, gasoline, fuel oil, condensate, etc. That's because it's available here and we can sell it to those who NEED it. We also trade oil and gasoline as commodities on a worldwide basis.
Some of our hydrocarbon products get sold into the chemical industries as feed stock for plastics (the computer you are typing on), medicines, auto components (tires, expanded polystyrene parts like dashboards), and host of other finished goods you would recognize if mentioned.
Anyway, the hydrocarbon business is complicated, very complicated and employs millions of people in this country. And it's not a handful of CEO sitting in a conference room planning on how to screw the public with higher prices.