The United States is the world’s largest oil producer, but Americans are still paying high prices for oil and gasoline. Many people wonder why fuel prices are rising when the US produces so much oil and imports only a small amount from the Middle East.
Oil prices rose again on July 14 after fresh military attacks between the United States and Iran increased fears of a surge in oil supplies through the Strait of Hormuz.
crude oilThe primary international oil benchmark rose as much as 3.8% on Tuesday, up 9.6% from the previous day. Brent futures for September delivery were at $85.92 a barrel by 08:00 GMT, the highest since June 15.
According to USA Today, fuel prices remain high due to the breakdown of the ceasefire between the United States and Iran.
Why are prices rising?
Even though the US produces more than 13 million barrels of crude oil per day, it still imports about 6 million barrels per day because domestic demand is so high. About 8% of America’s imported oil comes from the Middle East. At first, it might seem like problems in the Middle East should not affect US fuel prices.
The main reason is that oil is sold on a global market, where buyers around the world compete for the same supply. “This is a global market,” Mark Zandi, chief economist at Moody’s Analytics, told USA TODAY earlier this year. “So, oil literally flows at the highest price. If a tanker can get a higher price in Malaysia than in Rotterdam than in Rio de Janeiro, it will go to Malaysia,” Zandi said.
What effect did the US-Iran war have on oil?
Worldwide oil prices rose after the United States launched airstrikes against Iran. The price of West Texas Intermediate (WTI) crude oil rose from about $67 on February 27 to about $105 on March 30. conflict interrupted oil supply to the middle east. According to USA Today, the risks include the possible closure of the Strait of Hormuz, threats to oil tankers and damage to oil facilities.
Many countries in Asia and Europe are heavily dependent on Middle Eastern oil, so fears of reduced supply sent prices higher around the world. Higher global oil prices also raised fuel prices in the United States. “Everyone is competing for the same barrel of oil,” James Cox, managing partner of Harris Financial Group, said in an interview with USA TODAY earlier this year. “It doesn’t matter whether it’s produced in Texas or Iran or Saudi Arabia or Russia,” Cox said.
Why doesn’t more US oil mean cheaper gas?
According to the Statistical Review of World Energy cited by Forbes, the US is the world’s largest oil producer, but it is also the largest oil consumer. American oil companies sell oil wherever they get the best price because they are part of the global market.
“We produce as much as we consume,” Zandi said. “But at the end of the day, the producers here are going to sell to whoever can get them the highest price. They’re businessmen,” Zandi said as quoted by USA Today. This means that higher international prices could also drive up prices inside the US.
US oil production explained
The 2026 Statistical Review of World Energy states that the US remains the world’s largest oil producer. There are two different ways to measure oil production. The first measurement is crude oil plus condensate, which includes the main forms of oil used to make fuel. Under this measure, the US would produce 13.6 million barrels per day in 2025. This was about 15.8% of total global crude oil production.
According to Forbes, Russia is in second place with 10.2 million barrels per day, while Saudi Arabia is in third place with 9.7 million barrels per day. Crude oil production in the US has been increasing continuously for almost 20 years. In 2025, US crude oil production is projected to increase by about 351,000 barrels per day.
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According to Forbes, other countries including Saudi Arabia, Brazil, Kazakhstan, Libya, Canada, Argentina, United Arab Emirates, Venezuela and Iran also increase production in 2025. The Middle East remains the world’s largest oil producing region, with 27 million barrels per day.
What is ‘total fluid’?
Another way to measure production is called total fluids. This includes crude oil, condensate and natural gas liquids (NGLs) such as ethane, propane, butane and natural gasoline. These natural gas liquids are not the same as crude oil but are still useful fuels and industrial products.
Under this broad measure, the US would produce 21.1 million barrels per day in 2025, according to Forbes. This accounts for 20.9% of global total liquids production. The US produced about 1.9 times more liquids than Saudi Arabia. Saudi Arabia produced 11.4 million barrels per day, while Russia produced 10.7 million barrels per day.
The big difference between 13.6 million barrels of crude oil and 21.1 million barrels of total liquids is mainly due to the US’s huge production of natural gas liquids. The American shale boom helped increase both crude oil and natural gas liquids production. According to Forbes, total US liquids production is projected to increase by about 790,000 barrels per day in 2025, accounting for about 23% of the world’s production growth.
America uses more oil than any other country
America remains the world’s largest oil consumer in 2025. Americans use about 19.4 million barrels of oil every day, or 18.8% of global demand. China was the second largest consumer with 17.4 million barrels per day, while India was third with 5.6 million barrels per day. America and China together will consume 35.7% of the world’s oil in 2025.
China recorded the largest increase in oil demand through 2025, followed by the United States. Oil is still used heavily in the US for transportation, aviation, freight, farming, factories, petrochemicals, and everyday consumer needs. Most of the future growth in oil demand is now coming from developing countries, especially in Asia. According to Forbes, non-OECD countries will account for about 88% of global oil demand growth in 2025.
Why does California pay even more?
The West Coast of the US is more affected by the oil supply problems of the Middle East because it is more dependent on oil from that region. Gas prices in California dropped to about $5.93 a gallon, according to Kate Gordon, CEO of California Forward, speaking to USA TODAY. “We don’t get anything east of the Rockies,” Gordon said.
Was this a second oil crisis of the 1970s?
Experts say the recent Iran conflict did not create fuel shortages like the oil crisis of the 1970s. There were no nationwide fuel rationing rules or major shortages in the US, with the long lines seen at some gas stations being mostly people trying to buy cheaper fuel at stores like Costco. During the oil crisis of the 1970s, America faced fuel shortages, rationing, price controls, a national 55 mph speed limit, and long lines at gas stations.
Economists said the recent conflict has led to higher fuel costs for drivers rather than a full energy crisis. Oil companies benefited from higher oil prices while consumers paid more at the pump. Some countries that are more dependent on Middle Eastern oil introduced measures such as fuel rationing, four-day workweeks, remote work, less use of air conditioning, and more public transportation.
“On net, you could say the U.S. economy is somewhat insulated from shocks, because we are such a big supplier,” Nikolai Rusanov, a finance professor at the Wharton School of the University of Pennsylvania, told USA TODAY earlier this year. “But that doesn’t help the consumer at the pump,” Rusanov said.
When can gas prices reduce?
Fuel prices have fluctuated in recent months but remain high despite news of a fragile ceasefire. James Cox said prices are likely to remain high until new oil supplies enter the market. According to Kate Gordon speaking to USA TODAY, oil facilities damaged during the Iran conflict could take a long time to recover. “Reconstruction will take several years,” Gordon said.
Global prices may remain high due to limited oil supplies while repair work continues. “It’s impossible to get back what we had,” Zandi said. “At least not this year,” Zandi said.
According to the 2026 Statistical Review of World Energy, the US is both the world’s largest oil producer and the world’s largest oil consumer. Producing record amounts of oil does not protect the US from global price increases because oil is traded on a worldwide market.
Any disruption in global oil supply, especially in key producing regions like the Middle East, could send prices rising everywhere, including United States of America. Experts say America’s massive production makes the economy more secure than many countries, but that doesn’t stop drivers from paying more for gasoline when global oil prices rise.
