John W. Schoen Senior producer • Profile • E-mail

With gasoline prices zooming toward $4 a gallon — and beyond — readers are looking for relief and explanations. If fuel is in such short supply, why are refiners shipping some of it out of the country?

I just read that refineries are exporting diesel. Is that true? And if it is true, then it proves how the oil companies are manipulating the prices!
— Craig, Fort Collins, Colo.

You're half right. Yes, despite its role as the world’s largest importer of oil and refined products, the U.S. also exports fossil fuels. As of March, the latest data available, U.S. oil refiners were exporting more than 1.8 million barrels a day of crude oil, gasoline, diesel, jet fuel and other refined products. The top five destinations for U.S. fuel were Mexico, Canada, the Netherlands, Chile and Singapore.

But no, the export of crude oil and refined fuels doesn’t prove anything about pump prices. What it proves is that crude oil and gasoline are global commodities. They are produced in dozens of countries around the world and consumed pretty much everywhere.

Since the market for oil and fuels is also global, it doesn’t matter where it came from. What matters is where the seller can get the best price. Since oil tankers burn fossil fuels to get where they’re going, higher fuel costs have increased the cost of shipping. So if you’re looking to buy or sell oil or gasoline, you’d rather deal with someone close by.  

This is one reason gasoline prices vary widely from one part of the nation to another. The biggest concentration of refineries is along the Texas-Louisiana coast, where you can usually find the lowest gas prices in the country.

At this writing, a gallon of regular will set you back $3.75 at the Valero station in Texas City, Texas, the Gulf coast town where they make the stuff. (While you’re filling up, check out the Valero refinery on the other side of the street where, on a good day, they churn through close to 250,000 barrels of crude.)

If you own one of those refineries on the Gulf coast, and you’ve got buyers for your product in New Jersey, California and just south of the border in Monterrey, your shipping costs to Mexico are much lower. Although Mexico is one of the world’s largest exporters of crude oil, our southern neighbor is a net importer of refined products like gasoline.

Mexico ships us oil, we refine it into gasoline and sell some of it back to Mexico.

The location of refineries plays another role in exports: Not all refineries in the United States are U.S.-owned.  For example, Venezuela owns the three CITGO refineries in the United States. Most of the 750,000 barrels a day of fuel produced at those refineries is sold at the nation's 14,000 CITGO gas stations, but about 30,000 barrels a day is shipped back to Venezuela, where you can fill up for the government-subsidized price of 19 cents a gallon.

It’s also true that the U.S. exports crude oil — but only little. According to the latest Department of Energy figure, about 29,000 barrels of U.S. crude left the country in March — and all of it went to Canada, which sends roughly 2.5 million barrels day our way.

The exports to Canada represent a small part of the output of Alaskan oil that can be cheaply shipped to nearby parts of Canada.

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