December 15, 2019
Business

Trump calls Germany slave to Russian gas but is US overly dependent on Russian oil?

At last weeks NATO meeting in Brussels, President Trump criticized Germanys reliance on Russian natural gas, saying “Germany is totally controlled by Russia.”

“They will be getting between 60 and 70 percent of their energy from Russia and a new pipeline,” he said.

President Trumps point was that Germanys purchases of Russian natural gas were making Russia richer, and that this posed a concern for NATO. He later took to Twitter to complain “What good is NATO if Germany is paying Russia billions of dollars for gas and energy?”

What good is NATO if Germany is paying Russia billions of dollars for gas and energy? Why are there only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europes protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025.

— Donald J. Trump (@realDonaldTrump) July 11, 2018

PBS News Hour argues that the Presidents numbers are incorrect in any case. The story notes that Trump was referring to the Nord Stream 2 Pipeline that is being built between Russia and Germany, but:

“Trumps assertion that the pipeline will provide 60 to 70 percent of Germanys energy is incorrect. While Russia will be able to increase the amount of natural gas it sells to Germany through the pipeline, Russian gas will only provide a sliver of the overall energy Germany needs. Germanys energy comes from a diverse mix of oil, coal and renewables. Less than one fifth of the countrys power is powered by natural gas; at the moment, just 9 percent of the countrys power is generated by Russian gas.”

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This led me to wonder, by comparison, what percentage of US oil imports are being provided by Russia. US reliance of Russian crude oil has fallen since peaking at 624,000 barrels per day in 2011. However, in 2017 the US still imported 384,000 barrels per day of crude oil and products from Russia.

Incidentally, assuming $50 per barrel for those barrels means the US spent about $7 billion on Russian oil in 2017.

Total US imports in 2017 were 10.075 million barrels per day. The Russian contribution was then about 3.8 percent of US, certainly not in the range of Germanys reliance on Russian natural gas.

Russia was the 6th most important supplier of US crude oil in 2017. The US reliance on foreign crude in 2017 was higher for imports from Canada (39.9 percent), Saudi Arabia (9.4 percent), Mexico (6.8 percent), Venezuela (6.7 percent), and Iraq (6.0 percent).

Overall, OPEC provided 33.3 percent of US crude oil and finished products in 2017. We are certainly making OPEC richer with our crude purchases to the tune of about $60 billion last year. I cant say whether this poses a problem for NATO.

This article was originally published on Oilprice.com

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