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URL:  http://boards.fool.com/crude-oil-and-other-sources-of-energy-are-often-30320443.aspx

Subject:  Re: Are We Energy Independent? Date:  10/15/2012  1:29 PM
Author:  AOLFoolman100 Number:  648932 of 740256

Crude oil and other sources of energy are often sold over the major exchanges globally. They are sold globally and use benchmarks such as Brent, West Texas Intermediate, etc., which have differing physical characteristics such as the sulphur level content - (sweet crude, sour crude, etc.)

It's not the case that if, for example, the US uses 10 million barrels a day (made up number) and we produce 10 million barrels within our borders, therefore all 10 million barrels stay within the borders. It's not even remotely that simple. Large multinational companies like Shell, Chevron, Exxon, etc. have well sites all over the world, over land and sea. They sell to countries, peoples, and other organizations all over the world. They have contracts with each other, transport/shipping deals, etc, that determine whether the buyer gets the oil from Nigeria, Gulf of Mexico or the North Sea, etc. It's very complicated network. Even the physical characteristics of oil, such as sulphur content will determine where the buyers gets the oil. Typically lower sulphur content are preferred (sweet crude) because the process of refining it to products like gasoline, jet fuel, etc. is much less energy intensive than sour crude. There are a multitude of reasons why oil is often shipped long ways around the globe.
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