The present conflict in the Middle East has despatched the worth of oil spiking — and with it, US gas prices.
Crude prices leapt over $100 per barrel on Monday. In the US, the average gas price was $3.48, up 50 cents for the reason that US entered conflict with Iran.
The present power disaster underscores an essential reality: US gas prices are inseparable from the worldwide oil market. And despite the fact that the US is the largest exporter of oil globally, it could actually’t make up for the standstill of oil tanker visitors by way of the Strait of Hormuz, plus Middle East oil stalwarts Saudi Arabia and the United Arab Emirates beginning to scale back their manufacturing.
While the shale revolution — with new fracking strategies extracting more oil from Texas, New Mexico and North Dakota — has pushed the US to grow to be the largest oil producer in the world, this nation has realized the laborious manner that not all oil is identical. And the US consumes a special type of oil than we produce.
Oil falls on a spectrum from mild to heavy, relying on how a lot sulfur it incorporates. The stuff the US extracts from the bottom by way of fracking is an costly, mild crude oil. It made up most of what the US exported world wide in 2025: 3.9 million barrels per day.
Oil consultants name it “the champagne of crudes.”
But it’s totally different from the type of oil that has powered vehicles and business in the US for a long time. America was constructed on a thick, gunky crude that comes from different international locations together with Canada, Saudi Arabia and Central and South American nations.
“Some crudes are like coffee grounds — they’re gunky, awful, viscous, dirty. Some crudes are like champagne, light and un-sulfurous,” Bob McNally, president of consulting agency Rapidan Energy Group, informed NCS in an interview final 12 months.
The US pumps loads of home-grown champagne out of the bottom; round 80% of the oil produced here is mild crude, in response to the Energy Information Administration.
“It’s much lighter and sweeter,” stated Hugh Daigle, an affiliate professor on the University of Texas Austin and an oil knowledgeable. “It’s less viscous.”
Meanwhile, the US makes use of loads of “coffee-ground” oil. Last 12 months, we imported round 6.2 million barrels of crude oil a day from others — most of it both heavy- or medium-density. By far the largest supply of US oil imports is its northern neighbor, Canada, which despatched round 3.9 million barrels of crude oil per day to America in 2025.
But despite the fact that the US will get most of its oil from North American neighbors Canada and Mexico, it’s not immune from the power disruptions in the Middle East.
For one factor, Saudia Arabia is the third largest oil exporter to the US, sending round 270,000 barrels of oil per day, according to EIA data.
But more importantly, the oil market is a worldwide system.
“Oil is globally priced, and we all ride the same price rollercoaster,” McNally stated in a recent interview. “The reality of the global oil market is a supply disruption anywhere leads to a price shock at the pump everywhere — including the US.”
The prices for totally different grades of crude oil are set in a worldwide market. Even although a lot of the oil flowing by way of the Strait of Hormuz goes to Asia, the US is way from insulated.
US power infrastructure will also be impacted. Many US refineries —a few of which have been round for the reason that Nineteen Thirties or earlier — have been constructed a long time earlier than America’s light-oil growth and due to this fact made to deal with heavy crude.
Some US refineries have tailored to refine the nation’s mild, home-grown oil, although it varies by area and geography. For occasion, Gulf Coast refineries course of principally home oil as a result of they’re comparatively near the Permian basin in Texas and New Mexico. Meanwhile, refineries in Midwestern and Western states are closely reliant on Canadian oil as a result of it’s additionally comparatively close by.
The different elements refineries want to think about are the worth of crude oil (dirtier and heavier crude is cheaper than lighter), and the tip merchandise the refineries are making — every little thing from gasoline for vehicles, jet gas, propane and asphalt.
There’s rather a lot that goes into oil firms’ enterprise calculations, stated Jenna Delaney, a Rapidan Energy Group analyst specializing in international crude.
“It’s complex, it’s regionally specific and it’s a lot more complicated than saying, ‘we produce this crude, we should use all of it and not export any of it,’” Delaney stated in an interview final 12 months.