Saudi crude oil exports to us will actually decline if they ship it as gasoline instead.
It's not a bad development. The barriers to building new refineries enacted by lefties and their cronies are real. The increasing demand for gasoline has to be met somehow.
But total petroleoum exports will remain the same (or increase) when you add the refined and unrefined products. Plus, the Saudis will charge us extra to refine it.
It's not a bad development. The barriers to building new refineries enacted by lefties and their cronies are real. The increasing demand for gasoline has to be met somehow.
Short term, an increase in global refining capacity is good for the US, but it is foolish to forego building more domestic refineries. One bad thing that might come about as a result of this is that plans for domestic refineries are delayed even more, since "the Saudis will refine it, so we don't need to worry about it".
Exactly. They are proposing to increase gasoline production by 3 million barrels in five years but are only planning to increase crude production by 1.5 million. Crude exports from Saudi will decline by more than 1.5 million barrels if this pans out.
They need to do this as most countries don't want to build refineries for the increasingly sour crude coming from Saudi. Saudi's crude is sour and getting more sour and they need to insure that they have a place to refine it.
If the Saudi's were smart, they would work on LNG instead. There is a lot of wasted natural gas in the Saudi fields because there is no local market nor a way to transport.