The entire US refining industry is affected by any increase in the cost of imported crude oil. US refiners process about 16 million barrels per day of crude oil through roughly 150 refineries spread across the country. About half of this crude oil comes from US domestic production and half from imports, and this broadly holds true for all regions of the US. As a result, an increase in the cost of imported crude would directly raise the price of much of the primary feedstock for the industry.

More importantly, the cost of imported crude effectively sets the price for all crude oil—both imports and domestically produced volumes—sold to US refiners. Prices for different crude oils are essentially set by the producers competing for refiners’ business. This forces prices to equilibrate so that all grades from all sources are equally attractive to refiners. This means that any increase or decrease in the price of one major source of crude (such as imports) will quickly translate to a similar shift in all crude prices.