Net oil imports have decreased by 33 percent over the past six years; however, oil-related developments still host a number of policy problems for the United States.
Oil is a critical resource for the U.S. economy. It meets nearly 40% of total U.S. energy needs, including 94% of the energy used in transportation and 40% of the energy used by the industrial sector.1 Unlike other forms of energy such as coal and natural gas, which are largely supplied from domestic sources, net imports from foreign sources meet 45% of U.S. oil consumption, and thus the basis of many of the nation's energy security concerns.
The United States has been concerned about dependence on foreign oil since it became a net oil importer in the late 1940s. Those concerns grew with import levels, especially in periods of high or rising oil prices. Nonetheless, imports have generally increased over the last six decades, except for a period following the oil spikes of the 1970s and again in the last six years. Net oil import volumes and share of consumption peaked in 2005 and then declined through 2011 as a result of economic and policy-driven changes in domestic supply and demand. However, oil total (or aggregate) import costs have increased due to rising prices, which more than offset the savings from lower import volumes.
Net imports are gross imports minus exports (it is also the difference between domestic demand and supply). Interest in oil imports has climbed again as oil prices rebounded in response to global economic recovery in 2009-2010 and unrest in the Middle East and North Africa in 2011 (Libya, Egypt) and 2012 (tensions with Iran). Attention to oil exports grew in 2011, when the United States became a net exporter of petroleum products at a time when petroleum product prices were rising. Though it remains a large net importer of oil due to the need for crude oil from abroad, the United States recently started exporting more petroleum products than it imports.