We've been having some arguments about who makes money off of high
priced gasoline.

Here's _why_ I want to know the answer:  I have started hearing a new
argument from groups like Set America Free that "we're paying for both
sides of the war" by having such a high dependency on foreign oil. 
The interesting part of this though, is that these groups are mostly
staffed by neo conservatives, not environmentalists.   Anyway, their
premise is that by having low vehicle fuel efficiencies, we're paying
large sums of money to non-US friendly countries.

Whether or not one subscribes to this line of reasoning is not the
question.  The question is, on an percentage basis per country, how
much does each oil producing country make in profit(in actual cents)
from every gallon of gas sold? Now, I fully realize that this will in
turn depend upon how expensive the gas is, but let's just pick a price
and go with it.  I pick $2.50/gal.

The answer should look something like this (although I'm sure I don't
have my countries in the right order):

----------
Per $2.50/gal of gas:
A. Saudi Arabia get $0.10
B. US gets $0.05
C. Kuwait gets $0.03
D. Venezuela gets $0.02
etc etc
--------------------


So, what you need to do, is:
A. Back out from a $2.50 gallon of gas what the approximate
cost/barrel of oil is. Yes, I know this is only an approximation.
B. Figure out from that barrel how much of the cost goes to the seller
(in other words, does a seller really get $60 for that gallon of oil?)
C. What the breakdown is percentage wise per oil producing country
(e.g. Saudi Arabia 60%, US 20%, Azerbajain 3%, etc).  Assume that
every gallon of gas sold is a blend from oil coming from all sources
in the percentage to which they supply the world.
D. Calculate it out. 

***List the answer for the producers for the top 95% of the oil
producing countries (in other words, list the countries that supply
95% of the oil, and you can lump the rest into "other.")

***List your math and your sources.  Again, I realize there are
assumptions made in these calculations, but I'm sure they'll be mildly
accurate.

***Bonus points if you can find a semi-reliable relationship between
the cost of a barrel of oil and the price of gas (cheapest unleaded).

Of course, none of this will actually address the issues implied by
the impetus for this question, as that is a matter of political
impressions.  But I still want to know.  Perhaps I'll do a follow on
question if we get interesting numbers.

If you think this question is underfunded, let me know.

---

Request for Question Clarification by omnivorous-ga on 28 Aug 2005 19:37 PDT

Ken --

I think that the easiest way to calculate something close to what
you're seeking is a calculatin of production costs per barrel in
various countries.  Those numbers are available, though even then
there are problems (for example: what does it cost in the U.S. to add
a new source?)

Trying to reconcile oil production to per-country profits is
difficult, especially when it comes to who-owns-what in downstream
refining & marketing costs.  An example of the problems here is trying
to determine whether U.S./Venezuelan/Saudi gas stations each live on
the same 25%/30%/35% gross margins?

Best regards,

Omnivorous-GA

---

Clarification of Question by ken3141-ga on 28 Aug 2005 20:49 PDT

Nah nah nah, I must not have been clear enough.  Use the following assumptions:

1. All I care about is gas sold in the US.
2. Assume that such gas is made up in supplier percentages that are
identical to the worldwide producer percentages.  Thus, your concern
of what suppliers supply which gas stations is not a concern.  If, for
argument sake only, Russia produces 10% of the world's oil, then one
can assume that 10% of each gallon of gas comes from Russia.  And if
Oil is, say, $60/barrel, then that would mean that if "Russia" as an
entity gets 80% from a world price of $60/barrel, then Russia gets
$4.80 per barrel of oil that enters the US.  Then, the conversion from
barrel of oil to gallon of gas needs to be made, and that's the answer
to the question.
3. So, if one barrel of oil makes, say, 20 gallons of gas, then Russia
makes $0.24 per gallon of gas.

Obviously, the numbers are made up.  I just want someone to FIND the
information and plug the numbers in.

An interesting question, but I think there is still some confusion. 
If Russia (your example) produces 10% of world crude oil, that does
not mean that 10% of the crude used to make gasoline in the States
comes from Russia. Maybe no Russian crude oil is sold the America. 
And there are different types of crude, so possibly imports from some
places are less  - or not -  used to produce gasoline.
But maybe you are satisfied by an assumption that this is not the case
 - and also with an assumption that all moneys left in the countries
may be available to "pay for the other side of the war", which is not
true, of course, since some of the families raking in the money are
are putting some of it aside for "personal use".
Omniverous is on the right track  (of course), we have to know how
much each country receives on a barrel of oil exported to USA and the
amount exported relative to the total of imports AND US crude and its
price, since we have to include USA in the subsequent calculations.
Then we need to know how much of this total crude is used to produce
gasoline.  We don't have to worry about a hypothetical blend of
sources in every gallon;
it all gets to the pump somewhere.
(An average cost of refining, distribution, profit and everything else
except the cost of crude that also goes into the price at the pump
before taxes has to be calculated, so that we know what portion of the
pump price relates only to the cost of crude oil.)  (Parentheses added
later. Myo)
But this may be found out from a source on gasoline producing that
gives the volume of gasoline produced from a barrel of crude oil, thus
allowing a calculation that if so much gasoline is sold, that
represents so much crude oil from all sources (which we have already
identified), allowing a calculation of how much Iraqi crude oil is
refined and sold as gasoline, and we can figure out how much this
cost.
We are using some pretty sweeping averages, but we could continue then
to assume  that the cost of that Iraqi crude divided by the number of
gallons of gasoline it produced gives us a pennies at the pump value,
and then do the same for other countries.

Unfortunately, petroleum refining itself uses a lot of energy.  But
maybe the source (to be found) on gasoline production mentions this
and the number could be included in the calculation.

Hmm, that may not be clear, or correct, and it is certainly not an "answer".
Even if this is a possible approach, there is still a lot of research
necessary to put numbers into the calculation.

Myoarin

you should also keep in mind the very many 'kinds' of oil, for instance; 

A BTU of sweet oil is fundamentally different than a BTU of sour oil.
Sour oil is contaminated with sulfur and requires special refineries
with higher energy costs. Some giant oil fields (e.g., Manifa in Saudi
Arabia) are "virtually unusable" because they are contaminated with
hydrogen sulfide and vanadium (a heavy metal).
http://www.prospect-magazine.co.uk/highlights/essay_fleming/.

About a third of the natural gas produced in the lower-48 states is
known as "subquality". That is to say, it contains nitrogen (N2),
carbon dioxide (CO2) or hydrogen sulfide (H2S) in amounts that
preclude its use without being processed to remove these contaminants
or blended with volumes of less contaminated gas. Between one- third
and one-half of the discovered gas reserves in the lower-48 states
also falls into this subquality category. Since the processing adds to
the [energy] cost of production, subquality gas is not typically a
producer?s first choice. Once high quality reserves are depleted,
however, producers will need to implement cost-effective methods for
bringing greater volumes of subquality gas to the marketplace.
http://www.gri.org/pub/content/feb/20000224/110827/gtwnt00b-toc.html.

so no one formula would apply to all.

You are asking the right question, but respectfully in the wrong
pretense.  Having worked for the Pegasus Oil Company and understanding
the pricing structure, the money made per country is determined by the
bid at close on the NYSE and/or by a formula that is set prior to the
shipment of the crude.   Crude comes from the ground, and depending
upon who owns the rights of the minerals receives the royalty when the
crude is offloaded.  Example:  The Pegasus/Tiger corporation and Saudi
Aramco ship 1 million barrels of crude to their refinery in Baytown. 
At 70.00 per barrel, the cargo is worth 70 million dollars.  Should
Pegasus/Tiger and Aramco each own 50 percent of the shipment, they
split the 70 million equally.  35 Million to Saudi, 35 million to
Pegasus/Tiger Upstream Corporation (E&P for you non pegasusmobil
folks).   The cost of refining the crude now falls under the prudence
of Pegasus/Tiger Downstream Corporation (refining and marketing) which
pays the 70 million for the Crude.   Now, here is where the profit is
extended.  I pay myself for my product.  My cost is estimated at 6
dollars per barrel as to what I purchased it for or estimated through
accounting.  Today I will get 70.00.   This is why many corporations
in the 80?s were buying companies with reserves.  Imperial Oil was
purchased by Mobil who was later purchased by Exxon to become
ExxonMobil or the old cornerstone of the standard oil trust.  The
Imperial Oil deal set the price at 6 dollars per barrel and reserve
estimate at 7 billion barrels (If I recall, however you may correct
myself should I be wrong).

If I own the complete process of exploring, drilling, extracting,
transporting, refining and marketing the crude into gasoline, the
final cost is (approx) 37 cents per gallon or about 15 dollars per 42
gallon barrel of gasoline.
1 barrel = 42 gallons (Not 55 gallons)........Tack on a 255.00 dollar
per 10k delivery fee and you begin to comprehend the profits within
the Oil and Gas Markets.   The inflated  profits are experienced when
the bidders and traders of crude?. think that the world has ended and
that their crude is made of gold and with no competition, panic sets
in and the price skyrockets.   The standard mark-up on each gallon
refined (should you have to buy the crude on the spot market) is
approximately 20 cents.  Keep in mind that 38.4 cents is the average
tax that each state benefits from.  Some state excise taxes are as
high as 61 cents and some as low as 34 cents.  Take your pick !!! Add
additives and the cost varies.  Their are currently 17 blends of
Gasoline produced !!

The amount of money that a country makes is based solely on the number
of barrels shipped and who owns the product.  This is why countries
fight over Crude Revenues.   The additional profits are decided (as
stated) on your operational costs.  If you own the crude, then these
are great times (especially for the big Oils). Should you only refine
the crude, your profits are marginal due to your price contract
lock-ins. Should you explore for the Crude, the costs are estimated
based on each company E&P costs.

Numbers by the game: Approx Costs 
Owner and refiner of the Crude:  Total Cost is approx 37 cents per
gallon the refinery adds approx $255.00 charge to the stations per 10K
gallons delivered.
 
Spot market Purchase and your Refining of the Crude:   Operating costs
plus barrel costs plus station delivery costs.

The problem is not with the capacity of this country, the problem is
with the war.  With the US now committed to the war, the US Supreme
Court stated that George cannot attach the cost of the war to the US
Budget.  When the price was nose diving downward to 40 dollars per
barrel earlier this year, everything was starting to stabilize until
the US courts ruled against George, effectively cutting up his credit
card on war purchases and charges.  In the past, the Oil Cartel?s
would cheat to extend their profits, however today, they adhere to
strict quotas.  This is why Gasoline is no longer cheaper.  Crude oil
has a shelf life of approximately 6 months.

If you really want to get hot under the collar, check out the history
of Synthetic fuels.   Look for AGC 21 Technology (Advanced Gas
Conversion 21 Technology) or ?M Gasoline Technology? under the heading
of New Zealand Synthetic Fuels which was created by the OLD Mobil Oil
Corporation (Pennington, NJ)  in 1985 and at 30 dollars per barrel.

Today the cost is down to 25 dollars per barrel.  Question to any
reader.  Why would you sell a product at 25 dollars per barrel when
you can get 70 dollars for that same barrel ??

This is business!!  I do not agree with the Oil?s in pricing structure
(when it hurts the nation as one) even though I had worked for them
for nearly 21 years. But again, this is business!!

Capitalism and Democracy does not mix !!  It is Oil and Vinegar and
without the proper checks and balances, this is the end result.  OIL
is a commodity, it is traded !! When a product is traded, you can only
ensure price competitiveness through competition and not mergers.

When Exxon and Mobil were permitted to merge, the old folks knew that
gasoline would hit at least 2.25 per gallon.  82 thousand jobs were
lost and I am sorry to say, we were right.

Understand the value of Gasoline.  Where can we develop a fuel source
that can propel a vehicle in weight (on average) at 3000 lbs??.for
about 2 cents per mile?   This the question that needs to be
challenged !!  And trust me, I have worked with some of the most
brilliant minds in Energy?? and to-date, no one has yet to answer this
question????.

I hope that I have answered yours.......

Information to research: 
http://WWW.chemlink.com.au/gtl.htm
GTL Gas to Liquids Technology worldwide 
Synthetic Fuels
GTL (Gas to Liquids)
2700 Synthetic Fuel Patents owned by ExxonMobil   
M-GASOLINE Process or Technology (Mobil1 Oil and Synthetic Gasoline) 
Synthetic Crude Oil /Syncrude  
Fischer-Tropsch & Slurry Process