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Crude Oil Costs
Since the U.S. imports almost 65 percent of its crude oil, the global price of crude oil greatly affects U.S. refineries and consumers.
The amount of oil available each day fluctuates, and is based on two simple factors – how much crude oil can be produced and how quickly and efficiently that raw energy can be turned into gasoline and other products for consumers. That fluctuation is a reason why the price of crude oil changes every day.
On the Global Scale
About 40 percent of the world’s oil comes from the Organization of Petroleum Exporting Countries (OPEC), an organization of 13 oil-producing nations from the Middle East, Africa, Asia and South America, including Saudi Arabia, Venezuela, Iran, Iraq and Nigeria.
To put that into perspective, a global company the size of Shell only produces about three percent of the world’s oil. Because OPEC countries control nearly half of the world’s oil, when OPEC reduces or even announces plans to reduce its output, oil prices typically rise.
A Volatile Global Market
Turmoil in major oil-producing regions can affect available supply as well as prices. Examples that have caused the market to rise on concerns about future supplies of oil include the nuclear standoff between the West and Iran, movement toward greater government control of natural resources in Venezuela, war in Iraq, political disruptions in Africa and hurricanes in the energy-rich Gulf of Mexico.
Despite temporary disruptions such as these, global oil supplies have continued to increase. However, global demand has been growing faster than oil can be extracted and refined.