Business Monday

12 things to know about plummeting oil prices

Ken Roberts
Ken Roberts

It’s a little dangerous writing about a fast-moving topic like plummeting oil prices but it’s becoming apparent that, as is always the case in times of disruption and great change, there are winners and losers.

Many of the stories making news these days — lower gasoline prices leaving more discretionary income for consumers, for example – are also affecting our nation’s airports and, in particular, seaports as well as a host of leading trade partners and specific imports and exports.

The falling prices are sparking fears of deflation in Europe, and roiling the stock market here and around the world. Falling oil prices are putting pressure on the nascent U.S.-based shale oil and fracking businesses that had been rearranging the deck chairs of the ship called the global economy and greatly aided economic conditions in Texas and North Dakota.

From an import-export point of view, the story is still unraveling, since the U.S. Census Bureau releases trade data roughly 35 days after the end of the month. At the moment, the most current data is through November — and much of the slide in the price of West Texas Intermediate, the price you most often hear quoted — has occurred since then.

Nevertheless, here are some winners and losers:

Oil imports have suffered, of course. While overall U.S. imports were up 3.04 percent through November of last year to a record $2.15 trillion, the value of oil imports are down 9.50 percent to $228.72 billion, the lowest level since 2009, at the bottom of the global economic crisis. Consequently, oil, the nation’s leading import, is accounting for just 10.64 percent of all U.S. imports, which, while sizeable, is at the lowest percentage since 2009.

Canada is a winner, despite the overall decline in the value of oil imports into the United States from around the world. The United States now relies on Canada for more than 33 percent of all imported U.S. oil, the most ever by one nation. In fact, no other nation has accounted for more than 20 percent of all imports in at least a decade, if not longer. Canada stands to gain again, should the Republican-led Congress pass the XL Pipeline project and it survives a threatened Obama veto and any legal challenges that might arise.

China is a winner, with its imports up faster than the 3.04 percent overall U.S. rate. Imports from China are rising at a 5.75 percent clip. The United States imports more from China than any other country, and those imports are accounting for a record 19.83 percent of all U.S. imports through November of 2014.

Nigeria has been a big loser. By November of last year, imports from the African nation had fallen 76.35 percent from 2013, 85.93 percent from 2012 and a startling 92.22 percent from 2011.

Russia is seeing similar steep declines as well. Its U.S. imports are down 54.82 percent in 2014, when compared to the same 10 months of 2013. Those imports have fallen 80.72 percent and 90.21 percent over the two- and three-year periods, respectively.

The Western Hemisphere has, overall, been a winner. Six of the nation’s top 10 trade partners are nations in this hemisphere: No.1 Canada, No.3 Mexico, No.4 Venezuela, No.7 Colombia, No.8 Ecuador and No.10 Brazil. These six now account for a record 61.26 percent of all U.S. oil imports, a significant increase from 2008, when the percentage was 44.46 percent, and the first time above 60 percent.

Africa has been the big loser, largely because of Nigeria, but also because of declines from Angola and Chad. From a peak of 18.27 percent of the world’s oil imports into the United States in 2007, the top African nations in 2014 were accounting for 4.02 percent. Angola, ranked No.9, is the only African nation among the top 10.

The top Middle Eastern nations — No.2 Saudi Arabia, No.5 Iraq and No.6 Kuwait — have gained market share since 2008, when oil imports last set a record. In that year, the three Middle Eastern nations accounted for 23.07 percent; in 2013, the percentage had increased to 28.43 percent.

The Port of Philadelphia is a big loser, as far as oil imports. The port which once counted Nigeria as its leading trade partner, has fallen from the nation’s third most important port for oil imports in 2008 to No. 41 as of November 2014. Its percentage declines sound strikingly similar to those of Nigeria: Down 83.40 percent from 2013, 92.54 percent from 2012 and 95.59 percent from 2011.

The Port of Houston has been a loser, at least in terms of oil imports — refined petroleum exports are a quite different story. The declines in the nation’s No.1 port for oil imports are down further than the national averages: 11.90 percent in the first 10 months of 2014 compared to 2013, 30.52 percent over two years and 32.52 percent over three years. As oil imports have fallen and refined petroleum exports have risen, Houston has become one of only a handful of Customs districts to register a trade surplus.

The Port of Chicago has been a large winner as has the Port of Richmond, Calif., both of which are benefitting from Canadian oil, whether it is being barged in on Lake Michigan or shipped on the Pacific Ocean. Overall imports might be down but they’re up 28.86 percent at the Port of Chicago through November of last year, over the previous year, and it is now the nation’s second most important port for oil imports. A decade ago, it ranked No. 8. The Port of Richmond, where Chevron has a refinery, has jumped seven positions from 2008 to rank as the nation’s 10th most important port for oil imports as of November of 2014. Its imports are up 69.04 percent from 2013.

Closer to home, at Port Everglades, which doesn’t import oil but does import the refined petroleum that fuels the southern half of the state, imports through the first 11 months of 2014 toped $3 billion for the first time since 2008, right before the global economic crisis. It is the nation’s sixth most important port for refined petroleum imports.

Ken Roberts is the founder and president of WorldCity, a Coral Gables-based company that pays attention to the impact of globalization on local communities. More import-export trade data is available at www.ustradenumbers.com. He can be reached at kroberts@worldcityweb.com.

U.S. oil imports

  

U.S. Oil Imports

Nov. 2014 YTD

1-year change

1-yr change

10-year change

10-yr change

Change

Nov. 2014 YTD

World Total

$ 228,723,644,730

-$24,017,196,767.00

-9.50%

$104,855,690,752.00

84.65%

0

1

Canada

$ 76,176,861,694

$5,629,305,366.00

7.98%

$58,834,572,165.00

339.25%

0

2

Saudi Arabia

$ 42,064,599,732

-$3,606,001,239.00

-7.90%

$24,327,332,948.00

137.15%

0

3

Mexico

$ 25,821,763,614

-$2,954,675,696.00

-10.27%

$9,190,234,596.00

55.26%

0

4

Venezuela

$ 24,140,606,340

-$1,484,387,784.00

-5.79%

$7,336,341,391.00

43.66%

1

5

Iraq

$ 12,521,311,132

$5,236,353.00

0.04%

$4,955,308,571.00

65.49%

1

6

Kuwait

$ 10,438,908,282

-$761,373,023.00

-6.80%

$7,737,045,606.00

286.36%

-2

7

Colombia

$ 9,357,011,304

-$3,943,481,557.00

-29.65%

$7,091,494,393.00

313.02%

1

8

Ecuador

$ 6,679,055,581

-$1,382,242,208.00

-17.15%

$4,119,471,806.00

160.94%

1

9

Angola

$ 4,804,304,086

-$3,019,434,060.00

-38.59%

$997,976,053.00

26.22%

1

10

Brazil

$ 4,617,259,442

$789,289,546.00

20.62%

$3,844,569,038.00

497.56%

-3

11

Nigeria

$ 2,333,729,330

-$7,534,936,678.00

-76.35%

-$11,739,673,782.00

-83.42%

0

12

Chad

$ 2,059,547,300

-$240,636,264.00

-10.46%

$1,432,983,666.00

228.71%

10

13

Argentina

$ 969,924,967

$439,618,131.00

82.90%

$284,459,718.00

41.50%

2

14

Azerbaijan

$ 952,890,720

-$29,929,313.00

-3.05%

$952,852,658.00

2503422.46%

-1

15

Russia

$ 754,464,059

-$915,450,700.00

-54.82%

-$922,880,648.00

-55.02%

Source: WorldCity analysis of U.S. Census data

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