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 ...
Global natural gas supplies are being noticeably affected too.
Modest shortages can have very oversized seeming effects - it’s the way our system works to create greater supply “quicker”.
That said, I am very uneasy about Hormuz (which is really the entire Persian Gulf, the Strait of Hormuz, at least the north half of the Sea of Oman, and, it looks like now, the Red Sea.) Trump is all over the map regarding “Hormuz”, and the Euro’s simply don’t have the deployable* critical capacity - enough high end missile defense ships - to do the job of protecting either commercial shipping (100’s of ships over a large area) or the naval assets needed to deal with mines and drones.
*The UK has 6 good missile defense destroyers. At the beginning of this dustup, ALL SIX were laid up in port for maintenance / repairs. A few days ago, England FINALLY got one to Cyprus to defend their base there. SFAIK, they have no other missile defense ships ready to head to the ME.
The French might be able to come up with a few missile defense ships, but after that, who? China?
Iran & the Houthis could literally be left with only 20 missiles, and control oil flow out of the ME. Consider the parallel in the Black Sea, where Ukraine, with limited weapons, has driven Russia’s Black Sea Fleet out of the Western Black Sea and Sevastopol.
I do not doubt the job (open up shipping in the ME) can be done. I just don’t see how it can be done in a few months without US.
Why would USA energy producers sell their products in the USA if the international price is much higher?
Thankfully gas isn’t like food...keep the price the same but you get less so your $2.69 a gallon is still $2.69 but you get a half pint.
Two words: WALL STREET
A friend told me that they can not buy gasoline in Thailand right now.
That it comes from China and they are not shipping any to them.
So a country of twenty million is back to riding bicycles
The last large refinery was built in 1977. Per Grok:
“As of early 2026, America First Refining announced plans for a new ~168,000 bpd crude oil refinery at the Port of Brownsville, Texas. ... Groundbreaking is scheduled for Q2 2026 with full operations potentially in 2029 if construction proceeds on schedule.”
Perhaps. 😁🤙
“we also have Venezulian oil in our grasp as well.”
Under communism, Venezuelan oil production fell about 70%. Perhaps production would have increased in the absence of communism.
We can expect Venezuelan production to slowly increase over current levels.
“Government (at all levels) make more on a gallon of gas or diesel than every other link in the supply chain.”
Thanks for the reminder.
I look at it this way. It’s not that our prices aren’t determined by what’s going on in world markets. Rather it’s that since we are a net oil exporter, we don’t have to worry about supply shrinking up. That’s a Europe and China problem.
refineries shut down in California this year
we knew gas would go up
Not many oil companies are clamoring to open refineries since one of our two political parties wants to get rid of oil. Democrats are going to run the govt at some point. Why take the chance?
I understand that oil is a global product, one of my favorite words is fungible, but oil produced within the United States does not have to be controlled by world prices. Our natural gas prices are not controlled by world prices. Theu are not even uniform across the US.
As an oil producer I would want the most I can get, however it does not have to be so, like natural gas.
However Capping US oil prices at say $80 would still be more than they were making just a month ago.
Side note oil prices have doubled yet gas has gone up around a third, $1 at least in my area, and can get 88 octane from sheetz for 3.49 still
.
One post mentioned the Ukraine taking out Russian oil fields. Thanks a lot. Somebody destroyed the Nordstrom pipeline.
Gas prices have dropped over 20 cents per gallon in the last 2 or 3 weeks here in central Texas.
My wife and I had this exact conversation last night. When I explained it, she understood
I know that we swap like crude for heavier crude because of our ability to refine heavy crude, But we still come up 6 1/2 million barrels short we’re having to buy on the open market That we cannot produce here in the United States We would have to produce close to 21 million barrels a day
Meanwhile California is buying Russian oil
India refines and exports California specification gasoline from cheap Russian crude
Opportunists with usurious levels of greed.
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