Editorial: "4 Oil Market Myths That Just Won’t Die"

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They've been debunked. Repeatedly. But like zombies in a horror movie, these oil market myths just won’t stay dead. From campaign slogans to cocktail party arguments, here's what the data really says.

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1) The U.S. is Energy Independent

Energy independence has been a key slogan in the campaigns and presidential terms of President Donald Trump. Make America Great Again and Make the US Energy Independent have often been tied into one pledge or claim.

Fact: While the U.S. became a net petroleum exporter in 2020 for the first time since records began in 1949, it still imports more than 8 million barrels per day (bpd) of crude oil, refined products, biofuels, and hydrocarbon gas liquids. In 2023, about 6.48 million bpd of that was crude oil—roughly 76% of total gross petroleum imports—according to the U.S. Energy Information Administration (EIA). That means the U.S. exports more total petroleum than it imports, but it remains a net importer of crude oil specifically.

The top five source countries of U.S. gross petroleum imports in 2023 were Canada, Mexico, Saudi Arabia, Iraq, and Brazil. Canada alone accounted for more than half – 52% -- of all petroleum imports into the United States. Mexico came second with an 11% share and Saudi Arabia third with 5% of all U.S. gross petroleum imports.

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Despite record U.S. crude oil production, U.S. refineries need heavier crudes than the light crudes from the shale basins to process into fuels. That’s another reason why Canadian crude is the biggest foreign source of crude apart from the proximity and the pipelines shipping it south to the demand and refining hubs in the Midwest and the U.S. Gulf Coast.

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]2.) OPEC Alone Controls Oil Prices
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Another myth that’s been around since the Arab oil embargo in the 1970s is that OPEC, the Organization of the Petroleum Exporting Countries, is solely responsible for international oil prices.

Not that OPEC hasn’t tried – and succeeded – through the years in boosting or tanking oil prices, but the price of oil is not only a function of supply, much of which the cartel controls.

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Slowing demand – even if it’s only forward concerns about weaker demand not actual data points – depresses oil prices. The most recent case in point is the market rout from early April, when President Trump’s tariff announcement sparked concerns about looming recessions.

Oil prices are also often influenced by geopolitical events, including wars and conflicts, which are outside of OPEC’s control.

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3) The U.S. President Can Control Gasoline Prices in America

The most recent Middle East conflict was put out after a U.S. strike on Iranian nuclear sites. The ceasefire announced by President Trump eased the upward pressure on oil prices, which returned to pre-war levels.

The President may have indirectly influenced the price of oil, but not a single U.S. President can control global oil prices, which are the largest price component of U.S. gasoline prices.

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Presidents mostly tend to take credit for lower gasoline prices and blame high gasoline prices on previous administrations, Putin, or whomever appears conveniently blameable. That’s to confirm the adage that high gasoline prices are one of the worst fears of a sitting President.

Most recently, former President Biden and the Democrats blamed Putin for the $5 a gallon gasoline price in 2022.

President Trump and his allies are currently touting the energy policies for delivering the cheapest Independence Day gas prices in four years.

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4) Oil Will Soon be Replaced by Renewables

“Oil is dead,” said every headline since 2015. And yet, here we are…

The International Energy Agency (IEA) continues to insist on its narrative that a peak in global oil demand is still on the horizon—by the end of the decade.

Annual global growth will slow from about 700,000 barrels per day (bpd) in 2025 and 2026 “to just a trickle over the next several years, with a small decline expected in 2030, based on today’s policy settings and market trends,” the IEA said in its annual Oil 2025 report for the medium term.

Most industry analysts and oil majors expect demand to plateau at some point in the 2030s, but none see consumption falling off a cliff.

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Solar and wind could replace a large part of fossil fuels in power generation, but they cannot make petrochemicals, your Legos, jeans, jackets, or shampoos.

Despite endless forecasting, oil keeps adapting to the very trends that were supposed to kill it.

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