White House officials are bracing for oil prices to surge past the $150-a-barrel mark as the Iran war stretches into its second month and the Strait of Hormuz remains largely closed, according to a new report.
In recent weeks, the average cost of a barrel of crude has hovered around $100, a figure that the Trump administration now sees as the new “baseline,” though a potential spike to $200 hasn’t been ruled out, a source familiar with the matter told Politico.
As a result, officials have entered “all hands on deck” mode, urgently evaluating options to tame soaring oil prices — which pushed gas above $4 a gallon this week and risks inflating costs across the broader economy.
Isn’t the US a net exporter of oil. Can someone explain to me why this wouldn’t benefit them? Sell oil an increased cost with increased demand globally, cover costs at home with supplying the locally refined stuff for the population.
Anyone more in the know able to explain the gaps in my understanding?
You’re not wrong. The US could do that. But in the US there is no forcing function to make the companies subsidize the oil locally and they would rather make more profit by selling oil at the market price.
Part of it has to do with the fact that most of the oil we extract in the US now is shale oil, which is lighter and thinner than what they pull out with traditional extraction. Most of the refineries in the US are not equipped to process shale oil, so we export most of it, and import what we can process.
My theory, it’s not the government that has the oil, it’s the oil companies. And because this is capitalism, the oil companies will charge as much as the can. So even if it is made here, the drastically reduced supply globally means the companies can change more, and so they will.
The more exports of US oil/lng the higher the price for Americans. It’s not as though oligarchy pays taxes, so when you say America makes money, there is no trickle down to Americans.