Saudi Versus U.S. Oil - KXNet.com - Bismarck/Minot/Williston/Dickinson-KXNEWS,ND

Saudi Versus U.S. Oil

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Saudi Arabia enlarges its already big oil footprint that extends from the Persian Gulf to the Gulf of Mexico.  Does that reach stretch to North Dakota?

This Spring, completion of a ten billion dollar expansion to the Motiva oil refinery in Texas makes it the largest refinery in the U.S.  Motiva is owned by Saudi Aramco and Royal Dutch Shell.  Many see this as a security problem, as well as a set-up to displace domestic crude -- including Bakken oil -- with Saudi crude.

However, one expert says that's actually the reverse of what's bound to happen.  "It's about Saudi Arabia realizing, someday in the future, either under this Administration, or a future Administration, that the XL Pipeline is going to be built.  And when that occurs, it's going to displace Saudi oil.  Saudi Arabia is just trying to keep a foothold in the U.S. energy market, which is growing, and they're going to have to do it in the refining business," says Eugene Graner, President, Heartland Investor Services, Inc.

Saudi Arabia is home to the world's largest oil company.  But the expectation is that once the XL Pipeline is built, U.S. crude -- including Bakken oil -- will be cheaper than imported Saudi crude.  Currently, the number one raw product export of the U.S. is not wheat or meat -- it's refined gasoline.

 

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