Remedial Math
Correcting the record on US oil production and refining.
“What we see depends mainly on what we look for.” – John Lubbock
In some ways, the war in Iran has proved inglorious for those of us who specialize in energy market analysis. Had we been given the events of the past 75 days and asked to wager on front-month Brent crude at $150 per barrel, we would have greedily pledged our homes to take the over. While we wouldn’t be the first to be made homeless by the brutality of the markets, anybody who claims to have correctly predicted how oil prices would unfold is, well, almost certainly lying.
Getting the future wrong on occasion is just part of the business. Nobody bats a thousand. Learning from reality as it unfolds is the ticket to commercial longevity.
More troubling to the profession is the relentless proliferation of wrongheaded takes on the state of affairs in the oil and gas industry—especially America’s. Such claims are spread by many whose pedigrees suggest they should know better. A common theme: The US is in far worse shape than “they” are telling you, and calamity lies ahead. Here is a paraphrasing of the more widespread—and erroneous—assertions:
“The US is not self-sufficient in oil.”
“US refiners cannot process the type of crude the country produces.”
“US oil storage tanks will run empty in early July.”
If you have read such assertions and thought, “That can’t be true,” you would be right. Other than California, the US is well prepared not only to weather the storms of war but to thrive amid the maelstrom. Using nothing but publicly available information, let’s walk through the reasons why.