Imported Oil and U.S. National Security

The United States consumes 25 percent of all the oil produced in the world, yet the United States accounts for only 10 percent of world oil production. In 2007, on a net basis, the United States imported 58 percent of what it consumes. This monograph critically evaluates commonly suggested links between these imports of oil and U.S. national security and assesses the costs and benefits of potential policies to alleviate challenges to U.S. national security linked to imported oil. We focus on the following areas of concern Economic -- the potential for an abrupt fall in supply and the concomitant surge in the world market price of oil to disrupt U.S. economic activity to the point of precipitating an economic recession damage to critical nodes in the U.S. supply chain for refined oil products that could induce short-run local shortages or, if extensive enough, national shortfalls in refined oil products, resulting in a reduction in U.S. economic output and large increases in payments by U.S. consumers of oil due to shifts in oil prices because of deliberate reductions in supply by major exporters Political -- the potential of major oil exporters to manipulate exports to influence other countries in ways inimical to U.S. interests the potential for competition for oil supplies to exacerbate international tensions or disrupt international oil markets the effect of higher revenues from oil exports on the ability of rogue oil exporters, such as Venezuela and Iran, to thwart U.S. policy goals and the potential role of oil-export revenues in supporting terrorist groups and Military -- the additional costs to the U.S. defense budget of forces fielded to protect the supply and transit of oil from the Persian Gulf.