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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I’m seeing the same thing here in Texas.
100% true. Energy is the original input to all economic activity.
But you only see higher gasoline and diesel prices at your corner gas station. But America's energy inputs are natural gas, coal, nuclear, hydro, etc. etc. These are not affected at all. Plus we are far more efficient than we ever used to be.
Moreover there is no shortage at all. There is zero threat to supply. No one in the USA is scrambling to get energy (unlike Europe, China, Australia). The futures market shows oil price 25% lower in 6 months. You can literally buy that oil now and have it delivered in 6 months.
And once this war ends the present hot phase, spot oil prices will drop like a stone and so will your local gas prices.
So yes, higher gasoline and diesel will effect producer prices and consumer inflation on the margin - but anyone pushing the notion of "crisis" will look stupid in 6 months.
if we are energy independent.... The fact is we are not energy independent we import 6.5 million barrels per day are there about. But we are a lot better off than we were 10 to 15 years ago.
And Oil is the Now Gold Standard replaced
Actually it is. The US produces predominately light, sweet (low sulfur) crude that we sell at a premium and we refine heavy, sour crude that we buy at a discount. It works well almost all of the time but we are not in ordinary times. Europe, Japan and others buy refined products like gasoline and diesel from the Middle East and are now buying them from us which is putting larger demand on our capacity. Effectively we are competing against them at the moment for a capacity that is geared for us alone.
When you have a global product, local issues have minimal impact. After all of the oil shocks we’ve experienced since the 1970s, I am kind of surprised people need to re-learn this every few years.
Cause these Oil Companies are selling our oil overseas for a fat profit. and not protecting the American Consumers..Double dipping.
I’m predicting back to $2.60 by July...
The current battle with Iran will be over. There will be some sort of agreement to keep Iran from rebuilding its weapons systems. The U.S. or some of our allies are likely to control the Iranian Oil supply. The Straits of Hormuz will be open and the threat of closure removed.
Oil prices will plummet.
Because it is sold on the spot market, which means bidders are involved in setting the price, even though we will see no shotrtage in this nation, as we also have Venezulian oil in our grasp as well. Perhaps soon, we just might capture Iran’s oil as well.
That has always been my gripe. When oil goes up, gas prices go up with it. When oil comes down, gas prices stay high and are reduced only incrementally. I know that the margin on gasoline is thin - stations make more money selling beer and pop - but during times of unstable oil prices they make out pretty well.
Incorrect.
Delivery of all goods sold to American consumers happens how?
Truck.
Whether gasoline or diesel, and their delivery cost is calculated into the end price of whatever product (AND/OR SERVICE) is consumed by American Consumers.
Economics 101.
AMEN to that Brother!
You know who REALLY wins with high prices?
Federal, State & Local Governments who tax the hell out of fuel at the pump. Government (at all levels) make more on a gallon of gas or diesel than every other link in the supply chain. Especially when said government applies a SALES TAX percentage to each gallon of gasoline like Indiana and Illinois (for example) do.
In Illinois (where I escaped from) between the Federal, State, County and Local Governments all of which had their own taxes on every gallon of gas, as of just yesterday anywhere from 68 cents - 82 cents/gal was in TAXES ALONE.
A local gas station owner in Illinois makes on average @ 8 - 12 cents per gallon. That statement is likely true for many other states where they're making 15 cents/gal or less thanks in large part to federal regulations on how gasoline is priced and the lack of competition in so many areas where only three to maybe four or five companies control all the distribution.
Complaints about high gas prices should be directed at the Federal, State, County and Local levels of government. Not your local gas station owner.
Because (thanks to the bunny-huggers and the watermelons) the US consumes more oil than it can refine. So much or our oil is exported, refined elsewhere, then imported back.
When it comes to fuel we don’t have a free market,
we have a market run by Eco nut Democrats and RINOs
that despise freedom.
The idea that I can go to my car and drive across the country as I please drives them nuts!
They want to regulate everything.
RINOs in actuality are Democrats
in Republican skins.
It is all about control.
It is like having a child that is learning to walk.
You do your best to tell them how to do it,
but they are going to fall and get hurt.
Democrats don’t want us to learn. they want
to stop us from learning because
“They know best”. Problem is you never learn.
As adults our actions are a lot more serious.
Japan for example learned what being a
bully results in. They are checking China today
as China tries to bully Taiwan.
Nations in some respects aren’t different than Kids.
They to grow and learn how to play with
everybody else,
without being bullies or victims.
Democrats are bullies.
Oil analysts make a living screaming that the sky is falling...
Historically, they show no capabilities for predicting the oil market any better than your local trash collector...
Because of effing little prick futures traders. I hate them. Talk about profiteers whose nly contribution to society is makng money for themselves. Better they were all just gone
But this is somewhat misleading because the USA imports significant amounts from Canada. USA is still a net exporter, but not 30% of production
High sulphur high nitrogen tar sands oil is cheaper and can be processed by US refineries. The lower sulphur oil the US exports is worth more and is exported.
https://usafacts.org/articles/is-the-us-a-bigger-oil-importer-or-exporter/
“During this speech it jumped between $6-8 a barrel.” Perhaps on news that the Colonial Pipeline has been shut down for repairs.
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