Crude Oil Imports and National Security

Abstract

The authors demonstrate that the United States profits handsomely in all circumstances by imposing an embargo on imports of foreign crude oil. The US removes its exposure to foreign oil supply shocks and recovers deadweight lost producers surplus. The embargo plan will lead to greater domestic production of crude oil and alternative fuels without the tax and subsidy schemes heretofore employed.

Keywords: crude oil, import policy, OPEC, oil supply shock, price spike, embargo, imported crude, oligopoly

JEL Classification: Q4, Q40, Q41, Q42, Q43, Q48