We got to thinking over the weekend, after hearing that John Cassimatis of Red Apple Group owns an oil company, that the US could export its surplus oil to Europe and displace a lot of Russian oil.
As we unfold the oil opportunity below, it appears that any oil company, or a consortium of oil companies, could take advantage of this opportunity.
Oil is not export controlled, because the oil is owned by the privately held oil companies. However, some is produced on federal lands, which probably can’t be used for our little scheme. Oil companies could export any oil that they’re not now selling, which is about 2 million barrels a day as this is being written. One would probably have to subtract out any oil produced on federal lands.
Any oil company willing the challenge the Biden administration’s probably unconstitutional ban on oil production could participate.
To really put a dent in Russian oil exports to Europe, let’s say that we sell our crude, landed in Brussels, for $60 per barrel. We could go as low as $40, but $60 will put a serious crimp in Putin’s oil revenues, which is the idea behind the whole scheme.
If Putin has a crimp in his cash flows, he lightens up on the Ukranians. Or goes further in hock to the Chinese.
At $60 per barrel, the daily total revenues to the US oil consortium would be $120 million which probably isn’t enough to ruffle the feathers of the EPA.
A large tanker olds about 400,000 tons of something, which is 400 million pounds. A barrel of oil weighs around 300 pounds, so we’re exporting 1.3 million tons of oil, or about 3 or 4 very large tankers full per day. In a month, allowing for transit times, about 10 tankers at least could be utilized. Worldwide, there are over 8800 tankers of various sizes, so we’d be optimistic than tankers can be found.
It seems possible that enough tankers could be lined up in Houston ship channel where a majority of our oil pipelines terminate. Maybe send a few to New Orleans.
Get busy, boys and girls.