U.S. Protectionism Gives Boost to Russian Energy Imports

Colin GrabowAs outrage mounts over Russia ’s invasion of Ukraine, Americans may be chagrined to learn that despite being the world’slargest oil producer and a net exporter of petroleum products, the United States turns to Russia to help meet its energy needs. Indeed, imports of Russian petroleum products have averaged over370,000 barrels per day over the last decade, and in 2020 Russia was thethird ‐​largest source of U.S. petroleum imports. But why? While a number of factors explain this phenomenon, part of the answer lies in protectionist U.S. policy. More specifically, theJones Act.Passed in 1920, the Jones Act restricts the domestic waterborne transport of goods to vessels that are U.S.-flagged, U.S.-built and mostly U.S.-crewed and owned. But such vessels are several times more expensive tobuild andoperate than foreign ships, resulting in very high shipping rates. So high, in fact, that after factoring in the cost of Jones Act shipping it can often make more sense to buy products from distant countries rather than other parts of the United States —including petroleum.An explainer about the importation of Russian oil and petroleum released last week by the American Fuel& Petrochemical Manufacturers (AFPM), for example, strongly hints at the role of expensive domestic waterborne transport.U.S. West Coast refineries rely on imports of light sweet crude oil from other countries, including Russia, because access to U.S. produced light sweet crude ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs