Back to The hidden supply chain costs of the AI boom, with Willy Shih.
Why Is Algerian Oil Cheaper to Ship Than Texas Oil?
Willy Shih says Algerian oil is cheaper to ship to New Jersey than Texas oil because the United States does not build the supertankers the Jones Act requires for the domestic route. Refineries on the East Coast could not get Texas oil cheaply. Moving it from Texas to New Jersey takes a very large crude carrier that is owned in the United States and built in the United States. No domestic ships of that kind exist.
That missing ship is why the Jones Act was temporarily suspended. A foreign tanker can bring oil in from overseas. It cannot make the coastal trip from Texas unless it meets those tests, and the United States is not building those ships. Without a qualifying tanker, the voyage from Algeria costs less.
