Why Gas Prices Are Rising Hint: It’s All About the Exports

In 2011, the U.S. exported more petroleum products than it imported for the first time in over six decades, according to the Petroleum Supply Monthly February report by the U.S Energy Information Administration (EIA). Petroleum products were ranked second in value, behind vehicles, of all U.S. exports during 2011 at $111.1 billion—up 60% from 2010—according to U.S. Department of Commerce trade data.

“We are a net exporter now,” says Tom Kloza, chief oil analyst for the Oil Price Information Service. “If not for high prices [of gasoline] in the U.S., it would be something to cheer about in terms of helping the deficit.”

U.S. oil exports have increased substantially over the past decade—from approximately 425 million barrels in 2005 to over 858 million barrels in 2010. Over one billion barrels of crude oil were exported in 2011 according to the EIA, with total monthly exports topping three million barrels per day for the first time in the nation’s history. As of early March, 2012 has seen an average of three million barrels exported per day. Strong global demand for diesel in Asia, Europe, Mexico and elsewhere has motivated exports as diesel and other distillate fuels have a higher profit margin for U.S. refiners than gasoline.

Crude oil remains the biggest U.S. import, valued at $331.6 billion, up 32% from 2010. Record high gas prices are projected for 2012, driving up costs at the pump and the cost of flying.

“[R]ising jet fuel costs put significant cost pressure on the airline industry,” Steve Lott, vice president of communications at Airlines for America told CBS. “Regarding fuel, it was the airline industry’s largest expense in 2011…a record high of $3.00 per gallon for the year. It is even higher for the first two months of 2012.”