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Posted on 04/01/2026 6:59:57 PM PDT by CondoleezzaProtege
If the United States is the world’s largest oil producer—in fact, if we are energy independent—then why are we still at the mercy of global events? And how can prices spike instantly when the gasoline in the tank was made from cheaper oil weeks ago?
People like easy answers, such as “corporate greed.” That is emotionally satisfying, but it doesn’t tell the full story. What’s happening is a function of global markets, supply chain realities, and predictable patterns in consumer behavior. In fact, much of what we’re seeing is exactly how the system is designed to work.
The U.S. leads the world in oil production, but oil isn’t priced locally, nor are prices set by oil companies. Because the U.S. exports oil to the global markets, it’s priced globally by traders bidding for oil. That is a distinction many people do not realize.
Think of the oil market as a single, interconnected system. When supply is threatened anywhere, prices respond everywhere. And few places matter more than the Strait of Hormuz, a narrow passage through which ~20% of the world’s oil flows. When that chokepoint is at risk, traders price in the risk immediately.
That’s why a barrel of oil in Texas suddenly becomes more expensive even if nothing has changed domestically. U.S. producers sell into global markets, so American refiners have to match those prices or lose supply. Being the largest producer doesn’t shield us, it simply means we are deeply embedded in the same global system.
The second frustration—why prices jump before “cheap” gasoline is sold—comes down to replacement cost...
It’s also important to distinguish between different parts of the oil industry, because not all companies benefit equally from rising prices...
(Excerpt) Read more at forbes.com ...
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If we didn’t produce so much oil, prices would be surging a lot more.
A guest on a (conservative) local radio show today - didn’t catch the name - said that we will be feeling “shock” but DELAYED. Not sure if he meant with gas or just in general, economic...
Actually, here the gas prices just plummeted 35 cents...
I’m predicting back to $2.60 by July...
‘ I’m predicting back to $2.60 by July...’
Based on?
The Democrat narrative of a new “energy crisis” will be a failure.
Gas prices have risen, and while I do not believe Trump on everything, he is correct that it won’t last long.
First of all energy is a much smaller part of the US economy than it was decades ago. And also in the larger historical scheme of things, the present rise in gas and diesel prices is just a blip compared to price spikes in the past
The other 45% of America’s “fossil fuel” usage, natural gas, has actually DECLINED 10-15% in the last month.
Trump beating the hell out of Iran and the closure of the Strait of Hormuz has almost zero direct impact on the US economy.
IMHO, it will all have little effect on inflation (which will come from others places, particularly our $2 trillion deficits) and won’t be a political issue at all in a few months.
We have plenty of oil. The problem is refining it. We don’t have refineries that are meant for the type of oil we take from the ground. So we still have to ship our oil away for it to be refined. Our refineries are used to refine oil from other countries. It’s not a great system.
The capitalist system is not working like it should...otherwise when I recycle my aluminum cans I should get alot more..funny how that works.
Wishful thinking no doubt..During this speech it jumped between $6-8 a barrel..
Thanks for the encouraging words. I hope you are right.
Because oil is fungible...
Thanks for posting this. My wife keeps asking me and I have a hard time explaining it. This explanation is great.
Oil is priced on the global market, regardless of who or how much is produced.
“Actually, here the gas prices just plummeted 35 cents...
I’m predicting back to $2.60 by July...”
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Back in the real world, oil analysts are predicting oil prices as high as $200 a barrel by this Summer. That will translate into gasoline at $8-$10 a gallon.
You’re welcome! :)
I saw $5.65/gal Diesel in Indiana last night on my way back to TN from IL.
You're sorely mistaken if you think that doesn't have an impact on the US Economy.
Gas prices here in TN went from $2.29/gal to $3.99+.
Again, you're sorely mistaken if you think that doesn't have an impact on the US Economy.
The cost of Energy impacts EVERYTHING.
Natural gas is regionally priced, oil in US should not be tied to prices in Europe
Oil should be taken off the commodities market. It’s a matter of national security and it wasn’t always this way.
Reverse the mistake.
-SB
Regardless of where oil is drilled and refined, it’s measured by the whole. So when millions of barrels a day are locked up at the Straits, and Ukraine knocks out a third of Russia’s oil industry (at the same F’ing time!!!), we are all going to feel that gap of worldwide supply. It has shrunk.
Oil greases the skids that a modern world moves and eats on - all the dipsht Greenie wet dreams aside.
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