Remember the part from Trump that America don’t need the rest of the world?
Well?
That it does NOT work THAT way with oil….
Trump ‘freelancing’ after getting rid of the ‘experts’ IS raising my price of gas….
The price of gasoline in the United States rose again on Tuesday, to an average of $3.54 a gallon, according to data from the AAA motor club.
That’s an increase of 19 percent since the United States and Israel attacked Iran, inciting a conflict that has engulfed oil production, storage and shipping from the Persian Gulf to the rest of the world.
In financial markets, concern that oil shipments from the region won’t resume soon has lifted the price of crude oil — the largest factor in the cost of gasoline — about 24 percent in the same period.
The gains show just how vital the Persian Gulf region is to global energy supplies — and how interconnected global energy markets are, even if the United States produces plenty of oil.
Here’s what you need to know.
Who sets gas prices, and how are they determined?
In November the cost of crude oil accounted for about 50 percent of the price of a gallon of regular gasoline, according to the most recent estimate from the Energy Information Administration.
Refining and distribution by big energy companies and taxes account for most of the rest, which is why prices vary regionally. Station owners have a little wiggle room to set the price they charge, usually just a few cents per gallon.
Why does a disruption in the Middle East affect U.S. drivers?
Oil, no matter where it comes from, is priced largely on global supply and demand. Prices can change quickly when supply is cut off by wars or weather, or if demand rises or falls.
The price that American refiners pay is underpinned by benchmarks set in the commodities markets. The two main ones are Brent and West Texas Intermediate, but there are many different oil prices across the globe — determined by where it’s produced and how far into the future it’s expected to be delivered.
By any measure, oil prices have surged: West Texas Intermediate futures are 30 percent higher than before the attacks began.
“When there’s a supply disruption in the Middle East, that raises prices for every barrel of oil in the world,” said Christopher Knittel, associate dean for climate and sustainability at M.I.T. “Those price increases then trickle down to products that use oil, gasoline being the most relevant one.”
But isn’t the United States the world’s largest oil producer?
Yes, but not all American-produced oil can be easily used by American refiners. The United States is a net exporter of petroleum products, which include gasoline, diesel, jet fuel and propane, but it still imports millions of barrels of crude oil.
In December, the United States imported about 200 million barrels of crude oil, according to the Energy Information Administration. That same month, it exported more than 350 million barrels of petroleum products, including 128 million barrels of crude oil….
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