Summary

President Donald Trump may soon feel the need to "blockade" U. S. crude oil exports after those exports hit a record high recently, a trend which, if it continues, will increase the price U. S. consumers pay for gasoline, diesel, and other petroleum-related products. Nations around the world are scrambling to secure oil supplies that have been dramatically reduced by Iran's closing of the Strait of Hormuz to oil tankers of "hostile" countries, which include major oil exporters such as Kuwait, Saudi Arabia, and the United Arab Emirates. In addition, the U. S. Navy has placed a blockade on ships from Iranian ports leaving the Strait of Hormuz, though the effectiveness of the blockade is in dispute. In an April 1 televised address, Trump said: "To those countries that can’t get fuel — many of which refused to get involved in the decapitation of Iran, we had to do it ourselves — I have a suggestion. Number one, buy oil from the United States of America; we have plenty. We have so much." It is true that the United States is the leading producer of crude oil in the world at 13.6 million barrels per day (mbpd) as of February. For comparison, Russia, the second largest producer, supplied 9.9 mbpd as of December 2025. The United States is also the leading user of oil. It is refining 21.1 mbpd of finished petroleum products as of late April. This number (strangely) includes about 2 mbpd of what are called natural gas plant liquids, which are not part of the petroleum refinery stream. But 21.1 mbpd minus 2 mbpd is still 19.1 mbpd—versus 13.6 mbpd of domestic crude oil production—which explains why the United States has actually been a longtime net crude oil importer. The difference between those two numbers is filled in by a combination of crude oil imports and what is called refinery gain, which is the expansion of the volume of crude that occurs when it is refined. I haven't been able to find a good number for refinery gain, but the U. S. Energy Information Administration estimated U. S. refinery gain at about 6.3 percent of total throughput, which would be about 1.2 mbpd (19.1 mbpd times .063). The rest of the volume is mostly imported crude with some ethanol and other chemicals, such as butane, mixed in. Some of the products of American refineries—gasoline, diesel and aviation fuel, for example—are exported, but the United States consumes the lion's share itself. The release of oil from the U. S. Strategic Petroleum Reserve (SPR) in response to the closing of the Strait of Hormuz and the resulting reduction in world oil supplies has temporarily flipped the United States into being a net exporter of crude oil. But that's because much of that release is going toward crude oil exports. Eventually, the SPR releases have to end. There isn't an infinite amount and the caverns where this oil is stored can't go below a certain minimum for engineering and legal reasons. And, importantly, U.S. oil producers and refineries are allowed by law to sell as much of their products as they choose to buyers around the world. And that explains why oil tankers have been pulling up to U. S. ports to fill up on U. S.-produced oil (currently around $100 per barrel), which can be sold for more in Asia, for example, where oil for immediate delivery reached $150 per barrel in early April. As long as U. S. prices remain significantly below the world price, companies that trade oil will fill up ships in the United States and sell their cargoes elsewhere. That will only serve to push U. S. prices up. At what price will the American public demand that American oil be kept at home to keep prices down? That's a question that American politicians may soon discover the answer to if the Strait of Hormuz remains closed. And it's not just oil that the United States is exporting. The country is the world's largest exporter of liquefied natural gas (LNG). That's natural gas, which is not available to the American market, and its sale abroad tends to push up domestic U. S. prices. In fact, upward price pressure is the whole reason U. S. natural gas producers sought the right to unlimited exports, so that their domestic sales price would become linked to the higher international price. Exports used to be restricted, but the industry argued that it was unfair to single out natural gas when almost all other American goods can be sold to the highest bidder anywhere in the world. The crisis in the Persian Gulf has cut off about 20 percent of the world's supply of LNG. That has only served to increase demand for American LNG and to incentivize the building of new export facilities. Again, will there come a time when natural gas prices rise so much in the United States that Americans will demand that LNG exports be curtailed to keep domestic prices down? Energy markets have been snarled by the Iran war and the effective closure of the Strait of Hormuz. The result is a worldwide rush for adequate supplies. Some countries have decided to hoard their supplies in the face of such uncertainty, including China and Thailand. Will other countries, including the United States, decide in some fashion to limit exports of petroleum products and natural gas as the crisis drags on? Both China and Thailand limited exports as a precaution. Such action elsewhere may only come as a result of public discontent and even unrest. By Kurt Cobb via Resource Insights More Top Reads From Oilprice.com - Venezuela Oil Exports Hit Seven-Year High - Woodside Struggles to Secure Buyers for U.S. LNG as Pricing Backfires - Indian Oil Raises LPG and Jet Fuel Prices