Where the oil comes from

This web page shows where we import oil from--Canada being clearly number one, especially in the bottom chart (total petroleum imports, which I think means crude oil plus refined gasoline and diesel), with only one Middle Eastern country in the top five. In May, imports comprised more than two-thirds of the oil used in this country, a figure which is bound to grow with Alaska's Prudhoe Bay oilfield being shut down.

Oil analyst Peter Beutel, president of Cameron Hanover, said shutting down an oil field is an expensive and risky step that is only taken in extreme circumstances. He said that suggests the 400,000 barrels a day produced in Prudhoe Bay could be shut off for some time to come.

"They wouldn't be shutting down Prudhoe Bay if this wasn't absolutely necessary," said Beutel. "Once you shut it down, you don't know what will happen when you come back. It could cause all types of problems."

Beutel said he expects about a 5 cent a gallon rise in gasoline futures due to the pipeline problems.

The outage will cut global daily oil output by about half a percent, putting more strain on an already tight market. Beutel said he believed the news in Alaska was outweighing even new threats out of Iran to shut production there if that country is hit with United Nations sanctions over its nuclear program.

"This is almost all Alaska," he said about Monday's price hikes. "It doesn't look like something that will have a quick fix or can be ignored by the markets. I think it's going to be measured in weeks, not days, and it could drag on for months."

Beutel said the shutdown is significant for markets because it was the one supply of oil that traders did not believe to be at risk from either geopolitical events, such as fighting in the Middle East, or hurricanes that threaten U.S. production in the Gulf of Mexico.

As of 1:30 EDT, oil is at $77.00 a barrel, close to the all-time high.