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Oil Imports and National Security: Is There Still a Connection?

This article examines the impact of oil imports on U.S. national security. It reviews oil's links with national security, and questions the arguments for curbing imports. Debated since the 1950s, the links are based on oil's unique role in fueling the economy, its role for the sparring superpowers during the Cold War, and the political instability of the Middle East. The article challenges the "military externality' argument that U. S. imports require military protection. It compares U.S. import dependency with the much higher import dependency of most other industrial countries, none of which have expressed a national security concern similar to that of the U.S. It also points out that the source of imports is irrelevant, as the petroleum market functions globally with respect to volume and price: a shortage anywhere is a shortage everywhere. Finally, the article discusses the oft-used balance of payments argument for reducing coil imports, questioning the calculations on which it is based. It concludes that any argument for reducing oil imports for balance of payments reasons applies equally to other imported commodities.

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Security and Geopolitics – Geopolitics of Energy; Energy Security and Geopolitics – Energy Security

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
Q48 - Energy: Government Policy

Keywords: Oil imports, energy security, US, SPR, National Security, OPEC

DOI: 10.5547/ISSN0195-6574-EJ-Vol15-NoSI-18

Published in Volume 15, Special Issue of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.