Friday, March 23, 2012

Part 3: Inter-Regional Trade Movements of Petroleum in North America

In Part 1, I introduced my  abbreviations, data bases and analysis methods, and in Part 2, I presented the global trends. 

Figures 1-6 show the data somewhat analogous to the global trends presented in Part 2, while Figures 7-10 show the inter-regional petroleum export trends to and from North America (NA) which is unique to the information provided in BP reviews for the years 2000-2010.

North American Gross and Inter-regional Export and Import Trends

As I explained in Parts 1 and 2, the EIA, just provides import and export data for individual countries which I can sum up to correspond to my nine global regions.  As such, for regions with multiple countries (i.e., all regions except China and Japan) these sums will include intra-regional and inter-regional import and export data, which I call “gross” imports or exports.

In contrast, the data in the BP review allows me to derive inter-regional total petroleum imports and exports for each region.  I also derived estimates of inter-regional crude and product imports and exports, by assuming that my correction factors for the totals can be equally and proportionally applied to the subtotals for crude and products.

Figure 1 presents NA’s total petroleum consumption (i.e., both domestic and imported), the total imports, and, the gross and inter-regional imports into crude and petroleum products, from the data reported by the EIA and BP. 

As you can see in the figure, the BP and EIA total consumption numbers (red circles and squares at the top) are in close agreement with each other and illustrate the long-term increase in petroluem consumption in NA since 1983, and more recently, a 4-year plateau at 9.1-9.2 bby from 2004-2007, and a down-turn thereafter.

Total gross imports (open red circles) peaked in 2005, at about 5.15 bby, or 56% of total consumption, while total inter-regional imports (open red squares) peaked in 2007 at about 4 bby, or 43% of total consumption.

The gross crude imports (open brown circles) peaked at 4 bby in 2005 although there is a plateau at about this value from 2004 to 2007.  The inter-regional crude imports (open brown squares) also show a plateau from 2004 to 2007 at about 2.9 bby and peak in 2006.

The gross (open green circles) and inter-regional petroleum product imports (open green squares) are very similar to each other, implying that the intra-regional imports must be very small at least in years of data overlap (2000 to 2009), which I will discuss later (Figure 5). There are some indications of a shallow peak in 2005 and 2007 of gross and inter-regional imports, respectively.

Figure 2 presents NA’s total petroleum production (i.e. domestic production, blue circles and square for EIA and BP data, respectively), crude oil production (open purple circle), and the gross and inter-regional total petroleum, crude and petroleum products exports. 

Figure 2 illustrates that NA's total petroleum production has been in a fairly narrow range from 5 to 6 bby since 1980, although there is a trend for a decline since a peak in 1985 (5.9 bby, EIA; 5.6 bby BP), until a recent up-tick in the last two years.  Crude production continues a more pronounced decline from its peak of 4.8 bby in 1985, implying, I think, that the recent up-tick is mainly due to other products like NGLs or biofuels.  Or, perhaps this is a reflection of shale oil production domestically, which I would think that this would be counted as part of crude oil production. Indeed the last two EIA reporting years for domestic crude production (2009-2010) does should a small up-tick.

Despite these overall rather flat or declining domestic production trends, NA's gross and inter-regional total exports (red circles and squares) are in long term upward trends.  Gross crude exports (brown circles) peaked in 2006, while inter-regional crude exports have been slightly rising over the last ten years. This might imply a recent down trend in intra-regional crude exports, but I will talk about this later (Figure 6).  Gross and inter-regional petroleum product exports are in relatively shallow upward trends.

In part 2 (Figures 2 and 3), I showed that the total global import and export pools of petroleum showed signs a plateauing and peaking around 2006-07, and so it is interesting for me to look at regional trends relative to these diminishing global import and export pools.

Figure 3 shows NA's imports relative to the respective total gross and inter-regional global import pools. Note that percentages for the gross import values only runs to 2008, because that is last year when the EIA reported global values, and that is the number I need to calculate a global import pool with which, in turn, I can use to calculate a percentage. Also, as you look at Figure 3, keep in mind that these are NA’s imports as a percentage of the gross global import pool, for the EIA derived data, and, the global inter-regional import pool for the BP derived data, respectively.

The gross global imports are bigger than the global inter-regional imports.  For example, from Figure 2 in Part 2, in 2008, the total gross global pool was 22.6 bby, while the total global inter-regional import pool was 17.1 bby.  This helps explain why, in Figure 3 above, NA’s relative share of the global inter-regional imports is higher than NA’s relative share of the gross global import pool, even though the absolute value is lower.

NA's relative shares of imports generally show more prominent signs of peaking than the absolute values in Figure 1.

NA’s gross total petroleum imports as a share of the total gross petroleum import pool (red circles) peaked in 2001 at 22.5%, and then bumped along a plateau (with a  prominent dip in 2002, post-911) for 4 more years before dropping down to 20.3 % by 2008, the last reporting year that I can calculate a percentage.  NA’s inter-regional total petroleum imports as a share of the total inter-regional petroleum import pool (red squares) almost peaked in 2001 at 24.1%, but then rose to a value slightly higher than this by 2005 to 24.2%, and then dropped down to 19.2% by 2010.

NA’s gross crude oil imports as a share of the total petroleum import pool (brown circles) peaked in 2001 at 18.4% and then gradually decline to 17.1% by 2008.  NA’s inter-regional crude oil imports as a share of the inter-regional petroleum import pool (brown squares) was actually at its highest value in the reporting period in 2000 at 18.7%, and has declined since then to 14.2% by 2010.

NA’s gross petroleum product imports as a share of the total petroleum import pool (green circles) actually peaked way back in 1988 at 5.8%, although it rose again to local peak in 2005 of 4.9%. At least from 2000 to 2010, NA’s inter-regional petroleum product imports as a share of the inter-regional petroleum import pool (green squares) plateaued from 2005 to 2007 with a peak of 6.6% before declining to 5% in 2010. 

Figure 4 shows NA's exports relative to the respective total gross and inter-regional global export pools, which, of course, is about the same as the global import pool.  Analogous to Figure 3, percentages for the gross export values only run to 2008.  Also analogous to the imports trends shown in Figure 3, these relative export amounts are expressed as a percentage of the total gross export pool and the total inter-regional export pool, and, these amounts are different: e.g., 23 bby of gross exports in 2008 versus 17.1 bby inter-regional exports in 2008.  This time however, NA’s gross relative exports are greater that the inter-regional exports.

I kept the same vertical scale as used in Figure 3 to make the point clear that NA’s petroleum exports are far less, about 3 times less, than its imports.  NA is a heavy net importer, although that trend is changing as we will see below.

Since 1986, NA’s gross total petroleum exports as a share of the total gross petroleum export pool (blue circles) has been in a range (e.g., 8.6% in 1991 to 7.3% in 2008) of total global exports, with a slight downward trend. On the other hand, since 2000, NA’s share of inter-regional exports have been in an upward trend (blue squares) increasing from 2.5% in 2000 to 4.1% by 2010.

NA’s share of gross crude exports are in a slight downward trend (5.7% to 4.6% from 1986 to 2008) and inter-regional crude exports slightly trending upwards (1.8% to 2.2% from 2000 to 2010).  

NA’s gross petroleum product exports have been in a range of 2.4 to 2.6% since 1986, while inter-regional product exports are trending upwards from 0.8 % in 2000 to 1.9% in 2000.

The difference between the gross and inter-regional imports or exports, shown in Figures 1 and 2, respectively, should correspond to intra-regional movements of petroleum.

For instance, Figure 5 shows the differences between the gross and inter-regional total, crude and product imports, which should equal the intra-regional values for these three quantities.  

The total (red triangles) and crude (brown triangles) intra-regional imports are both about the same at 1-1.2 bby.  As I noted above, this implies that the intra-regional imports must be very small, which is reflected in Figure 5 as product intra-regional products (green triangles) being close to zero.  The negative values for implying that the intra-regional imports from 2006-09 don't really make sense, because the gross product imports must always be greater then the inter-regional imports. 

Figure 6 shows the differences between the gross and inter-regional total, crude and product exports, which should equal the intra-regional export values for these three quantities. 

The total exports (red triangles) are about 1.2 bby with some large fluctuations in the last three years.  But unlike the imports, crude exports (brown triangles0 are substantially lower than the total and in somewhat of a downtrend.  Also, in contrast to the imports, the trend is for intra-regional  product exports to be increasing with large spike upwards in 2009, reflecting the spike in gross production export shown in Figure 2.

In principle the intra-regional import and exports should be identical, and, these differences in between Figures 4 and 5 illustrate the limitations in my procedure for deriving intra-regional changes.  As I explained in part 1 and 2 I am comparing the difference between two different data bases (EIA versus BP) and I am also deriving the crude and product exports from the BP data, by assuming that my factor for correcting for inter-regional imports and exports would be proportionally distributed between crude oil and petroleum products. The discrepancy between NA’s product import and product exports suggests that these assumptions are probably breaking down here.  In particular, there is probably a proportionally larger amount of intra-regional product imports than this procedure has not accounted for, and, I know of no way to account for.  Additionally, as I pointed out in Part 2, and it is also illustrated in Figure2, above there seem to be a systematic difference between the EIA's and BP's estimates of total production, and perhaps these systematic differences carry over to the import and export data. 

A final cross check of the calculation of intra-regional exports and imports
As a final check of the intra-regional import and export estimates presented in Figures 5 and 6, I used the trade movement data provided for USA, Canada and Mexico in the BP review. 

These data provide a unique means to cross-check the total intra-regional petroleum export and import data.  Because NA essentially comprises only three countries: the USA, Canada and Mexico, and the trade movements of petroleum are explicitly reported in the yearly BP reviews, I can explicitly calculate the total intra-regional imports and exports for NA.  This is unique as compared to any other my other defined multi-country regions (i.e., SA, EU, APr, ME, FS), because the individual movements between countries within those regions are not reported by BP. 

An example of how to calculate NA's total intra-regional exports and imports from the BP trade movement data, both equal to 4452 kbd or 1.62 bby for 2010, was presented in Part 1.  Analogous calculations were made for 2000-2009 and these data are presented in Figures 5 and 6 (orange triangles). 

From 2000 to 2005 there reasonable agreement between the difference (EIA gross minus BP inter-regional), and, intra-regional imports and export calculated directly from the trade movement data presented for US, Canada and Mexico.  But, thereafter, these two estimates of intra-regional imports and exports diverge.  Whereas the difference (EIA gross minus BP inter-regional) dips down the intra-regional imports, the exports calculated directly from the trade movement data stays fairly steady.

I give more creditably to the intra-regional values calculated directly from the trade movement data, because the trade movements between the three major countries in NA are explicitly reported in the yearly BP reviews, whereas the difference calculation is relying on two separate data sets that seem to have inherent differences.

These discrepancies are large enough to persuade me to reduce my future efforts at calculating intra-regional import and export trends for the other regions, using the difference between EIA gross minus BP inter-regional import/export data.  I will continue to show both gross and inter-regional imports and exports, but I will reduce the amount of time I spend on analyzing the differences between these two numbers.

Trade movements of total petroleum between North America and other regions

Figure 7 show the specific amounts of petroleum imported to NA FROM each of the eight other regions.  For reference, Figure 7 also shows NA's total (i.e., crude plus product) inter-regional petroleum imports from all 8 of the other regions (black "Xs"). This is the same as the data presented in Figure 1 (red squares).

As noted before in context of Figure 1, NA's total inter-regional imports plateaued from 2005 to 2007 and declined thereafter.  This trend is mainly reflected by the changes in imports from five regions: EU, AF, ME, SA and FS.  Absolute imports from EU, SA and ME are trending down while imports from AF and FS are trending up.  Imports from APr, JP and CH are very small (about 0.1 bby or less from all three regions for any of the years from 2000 to 2010).

In the year 2000, SA was NA’s top import source at 0.99 bby with ME very close behind at 0.96.  AF and EU were third and fourth, respectively, at 0.65 and 0.53 bby.  FS was a very distant sixth account for only 0.02 bby—the remaining Asia Pacific countries (APr)  were actually more important importers than FS at 0.08 bby.

By the year 2010 AF was the top importer at 0.92 with SA still in second at a slightly lower 0.85 bby.  The ME essentially swapped place with AF now at third at 0.67 bby.  EU is still the fourth importer at 0.37 bby, but if these trends continue, it will soon be eclipsed by FS whose imports to NA have increased over the last decade by over an order-of-magnitude since 2000 to 0.29 bby.

Figure 8 shows NA show the specific amounts of petroleum export from NA TO each of the eight other regions and again for reference, I show NA’s total exports (black “Xs” corresponding to the blue squares in Figure 2).  Note the different vertical scale compared to Figure 7.

As noted previously in the context of Figure 2, NA’s total exports are in a strong up-trend through the entire decade.  Where are these exports going to?   Well in the year 2000 NA exports went to EU, SA, APr and JP in that order.  By 2010, SA was the top destination for NA’s exports with EU and APr in second and third.  JP is still the distant fourth highest export destination, but it is about to be replaced by CH or AF which have risen from negligible imports from NA five years ago to nearly the same a JP by 2010.  Not surprisingly NA doesn’t export to ME or FS.

Figures 9 and 10 present the same data as shown in Figures 7 and 8, respectively, but expressing NA's imports or exports, to or from each of the eight regions, as percentages of the total global inter-regional import/export pool (of course, on a global scale inter-regional imports and exports are the same) .  For reference, I also show NA imports and exports as percentages of global import/export pool (“Xs” right vertical axis; note the different scale). 

Additionally, I have taken all of these data and made linear extrapolations of the 2000 to 2010 trends (linear regression analysis) out to 2021.  The r2 values for the linear regression analysis result shown in Figure 9 are pretty large for all of major import source regions:  0.94 for FS, 0.90 for ME, 0.85 for SA and 0.83 for EU.  For other regions AF, APr, CH, r2 ranges fro 0.42 to 0.70, and for JP whose slope is nearly zero, r2 was 0.02.  For NA's total relative imports r2 was 0.6.  The r2 values for the linear regression analysis result shown in Figure 10 and not quite as large for the major export regions:  0.78 for NA, 0.81 for SA, 0.19 for EU, 0.78 for AF, 0.20 for APr, 0.45 for CH, and essentially 0 for JP, ME and FS.

The percentages and linear regression lines in Figures 9 and 10, I think, nicely shows the over-all trends for decreasing inter-regional imports and increasing inter-regional over the last decade. 

As illustrated in Figure 9, in 2000, NA was importing 24% of the total global import/export pool.  And, 7.2%, 6.9% and 4.7% of that 25% was coming from SA, ME and AF, respectively, corresponding to 78% of NA's total imports.  EU was supplying 3.8% of that 25%, corresponding to 15% of NA's total imports.  

By 2010, NA was importing 19% of the total global import/export pool, and 5.6%, 5.1% and 4.0% of that 19% was coming from AF, SA and ME, respectively, corresponding to 77% of NA's total imports.  EU was now supplying 2.2% of that 19%, or 11% of NA's total imports. 

If the linear extrapolations of the last decade's trends are correct, then by 2021, NA will be importing slightly less than 16% (15.7%) of the total global import/export pool.  Of that 16%, 7.8%, 3.2% and 3.1% will be coming from AF, FS and SA, respectively, corresponding to 90% of NA's total imports.  Notably, AF is predicted to provide almost half of NA total imports.  EU is only providing 0.4% of that 15.7%, or 2.5% of NA's total imports.  And imports from ME are almost as low as the EU, providing 0.67 of the 15.7%, or only 4.2% of NA's imports. 

As illustrated in Figure 10, in 2000 NA was exporting 2.5% of the total global inter-regional import/export pool.  Of this 2.5%, 1.1% and 0.9% of this went to SA and EU respectively corresponding to 80% of NA inter-regional exports. 

By 2010, NA's exports amounted to 4% of the total global inter-regional import/export pool, and again most of this went to SA and EU.  Of the 4%, 1.8% and  1.1% went SA and EU respectively corresponding to 72% of NA's exports.  APr received 0.4% or 10% of NA exports. 

Assuming the linear trend depicted in Figure 10 hold, by 2021 NA's exports will amount to 5.2% of total global inter-regional import/export pool, with SA EU and APr receiving 2.4, 1.4 and 0.6 of this 4%, or about 85% of NA's exports.  Curiously, around 2106, NA will export more petroleum than it imports from EU, and therefore, NA will become a net exporter to EU. 

Figures 11 and 12 show the relative changes in NA's import sources and export destinations, respectively, as a percentage of NA's exports or imports in the years 2000, 2010 and 2021 (predicted).

Summary and Conclusions
North America is a large importer of petroleum, but there are signs that its absolute imports peaked around 2005-2007, and imports are in decline.   In 2000 and 2010 North America imported about 24% and 19% of the total global import/export supply pool, respectively; by 2021, this is predicted to be down to about 16%.  Over the last decade, North America's chief suppliers of petroleum have changed in order of importance, from South America, the Middle East and Africa in 2000, to Africa  South America and the Middle East in 2010.  If the last decade's trends continue, then by 2021, North America's main suppliers will be Africa, the Former Soviet Union countries and South America, in that order. 

Although it is a large net importer of petroleum, North America does export petroleum, and the amount of these exports have been increasing.  Whereas it exported about 0.35 bby in 2000, by 2010 this was up to 0.7 bby in 2010.  The bulk of the increase has been due to increase product exports.  These amounts correspond to 2.5% and %4, of the total global import/export supply pool, respectively.  And the trend continues North America would be responsible for about 5% of the global supply pool by 2021. The main destinations of North America's petroleum exports have been South American and Europe and it looks like this trend will continue. 

Why have North America's imports gone down and exports gone up?  Well, declining imports are probably at least impart due to the plateau and then decrease in the total global import/export supply pool since 2006 (see Figure 3 in Part 2).  Additionally, the decline in the economy, increased unemployment, and the aging population are also likely factors explaining decreased consumption.  Finally, increased consumption in other areas like China and other Asia Pacific countries is also competing for that diminishing import/export pool, driving up the cost of petroleum.

The lower domestic consumption and increased prices probably also explains why North America's petroleum exports have increased and are likely to increase in the future.  If petroleum is truly a fungible commodity, then it will go to the regions that can afford to pay the highest price for it.  Increasingly, that region is not North America. 

3-24-12: Although it is a wonderful tool, without which probably none of the material in this blog would have been published, BLOGGER does have its challenges.  One of those challenges is that what looks like a perfectly fine figure on my screen, doesn’t always look so good once published on BLOGGER.  I went back and bolded and increases the size of all the legends and axis labels of all the figures so that they don’t look so washed out.

3-25-12 I added figures 11 and 12 to better show the trends being discussed.

3-31-12 correcting a typo in figure 1
I will stay in the Western Hemisphere, and next time examine South America's Export and Import Trends. 


  1. "If petroleum is truly a fungible commodity then it will go to the regions that can afford to pay the highest price for it. Increasingly that region is not North America."

    If only we could get the "drill, baby, drill" idiots to understand that.

  2. Indeed, I would not be surprised to see any further increases in petroleum production, do to oil shale, tar sands, NGLs, "Plastic-Eating Monsters," etc..., to be substantially exported outside of North America.

    1. This article is rubbish !!! Canada is the biggest supplier to the USA of petroleum. Canada is not even mentioned here !!

    2. Anonymous, I considered just deleting your comment because it seemed that you were a (Canadian?) troll.

      But I decided to answer because probably you just didn't read the article very well.

      This post is about petroleum imports and exports into and out of North American as a whole. The USA, Canada and Mexico are part of North America. This is not about the USA exports/imports to or from Canada or to or from Mexico although I talk about that indirectly in terms of "intra-regional" exports/imports.

      You should actually read the article, and maybe also parts 1 and 2 for background before making an embarrassing comment like that.


Your comments, questions and suggestions are welcome! However, comments with cursing or ad hominem attacks will be removed.