Abstract
This paper develops a multi-country general equilibrium model that incorporates crude oil global sourcing by refineries and refined oil demand by downstream industries that are connected through international trade and input-output linkages. I exploit detailed data on crude oil imports of US refineries, and derive a new procedure that allows for an all-in-one estimation of which suppliers refineries select and how much they buy from each. Using the estimates to evaluate counterfactual policies, I find: (i) A boom in crude oil production of a source changes the relative prices of crude oil across countries modestly which I interpret as the extent to which the behavior of crude oil markets deviates from an integrated global market. (ii) Lifting the ban on U.S. crude oil exports creates notable distributional impact across American crude oil producers and refineries. (iii) Due to the importance of oil trade and consumption, gains from trade are larger compared to the existing benchmarks.
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