U.S. consumption of imported oil has increased dramatically since 1970, particularly from the mid-1980s onward. Through the first 11 months of 2006 the top suppliers of crude oil to the United States were Canada (1.8 million barrels per day), Mexico (1.6 million barrels per day), Saudi Arabia (1.4 million barrels per day), Venezuela (1.1 million barrels per day), and Nigeria (1.0 million barrels per day). By 2050, only 30 percent of the 28.3 million barrels of oil per day that the United States is projected to consume are likely to be from domestic sources, according to the EIA.
That obtaining most of one's oil from foreign sources can inflict severe economic damage became painfully clear to the United States during the 1973-74 oil crisis. The oil price spikes instituted by the countries of OPEC wreaked havoc on the U.S. economy. Yet the dependency on oil makes the U.S. economy vulnerable no matter the source, say many commentators. According to the DOE, for every million barrels of oil taken out of production each day, regardless of the region where they originate, world oil prices will increase by three dollars to five dollars per barrel. An increase of $10 per barrel has the potential to cut U.S. economic growth by 0.2 percent and increase consumer prices by 0.4 percent. Considering that oil is a worldwide commodity sold at a world market price, obtaining it from foreign sources merely multiplies the economic vulnerability of the United States, according to many who have studied the issue.
U.S. reliance on foreign oil has been associated with other costs, too. For example, the trade deficit tends to increase when oil prices and imports are high. Both the quantity of oil imported and the price of oil per barrel increase the portion of the U.S. trade deficit that is attributed to the value of oil. According to the U.S. Census Bureau, the United States had a trade deficit of $449 billion in 2000, and 20 percent of this deficit, reported the EIA, was the value of imported oil.36 As greater quantities of oil are imported into the United States at the world price, the U.S. trade deficit inches up further. Census Bureau data also indicate that petroleum products accounted for one third of the overall trade deficit increase in 2000, a year when the price of oil reached its highest level above any prior year since 1990. In the same year petroleum products also contributed to a worsening trade balance between the United States and Canada, Latin America, the Middle East, and the European Union (EU), the union of 25 European states that includes Germany, the United Kingdom, and France.
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