Problems of surplus have required the attention of the petroleum industry during most of its history. Satisfactory measures to contain the surplus have been devised in the United States, helped by a high degree of industry-government cooperation. In other countries there is not the same degree of cooperative care in smoothing out supply/demand imbalance. Profits are concentrated in the producing phase of the industry rather than in downstream operations, due in large part to the unique features of the U. S. income tax system. Nevertheless, integration is a valuable strategy because it assures access to market outlets and because it protects raw material costs. The legal and tax systems at home and abroad, availability of crude oil supplies, and the ability to sell these supplies are the key determinants of profitability.