Name: If US produces so much oil, why does the Strait of Hormuz matter?
Uploaded: 2026-03-08T17:00:51.000Z
Duration: 5 min 56 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

These red dots show the oil tanker traffic in the Strait of Hormuz before the U.S. hit Iran.

Iran responded by attacking oil tankers in the Strait.

Leverage in a war with a military superpower.

Around 20% of the world's oil and natural liquefied gas moves through this passageway.

We already know that gas prices are going to go up.

Right now, the US is producing more oil than any other country ever has in history.

So why are Americans already feeling this at the gas pump?

More than 80% of the oil that passes through the Strait of Hormuz will go to Asia, where the impact will be felt more sharply.

To understand what this means for the U.S.

i'm going to talk to one of the top experts on energy in the economy.

He was an advisor to President Bush during his first term.

The reality of the global oil market is that a supply disruption anywhere leads to a price shock at the pump everywhere, including the United States, because oil is globally priced and we all ride the same price roller coaster, if you will.

Global crude oil prices are based off of benchmark oil pricing.

The use of benchmarks helps buyers and sellers around the world decide the price for different types of crude oil.

Each benchmark, for instance, Brent West Texas, Dubai, is priced separately and represents oil from a different region with specific characteristics like density and sulfur content.

The US Pumps sweet light oil that's good for gasoline, and that's about it.

Producers in the Middle east mostly pump heavy sour oil good for asphalt, jet fuel and diesel.

US Refiners like to use the type of oil that's produced in the Middle east, also Venezuela and Mexico.

The US Mostly gets this kind of oil from Canada and Mexico.

Venezuela's infrastructure is degraded and the US Banned imports from Russia.

The key thing to remember though is I want to make this very clear.

The key issue is the price of crude grades overall is set in a global oil market.

And even when the Middle Eastern oils are disrupted, prices of all oils go up.

A lot of Americans are wondering, how bad could this get?

This isn't the first time there have been disruptions in the strait.

In the 1980s, during the tanker War, Iran and Iraq struck ships in the Strait, but

the flow of oil didn't stop because their attacks were limited and the US military escorted tankers through the strait.

But in 1979, during the Iranian Revolution and Iran Iraq war a year later, oil infrastructure was bombed, impacting production and causing a drop in the global oil supply.

During this time period, gas prices in the US More than doubled.

That supply loss caused a huge oil price spike that we remember today.

Jimmy Carter with the sweaters and the gas lines and so forth.

One of the main differences is today is that the US Is producing far more oil, which could help absorb the shock felt in the 1970s and 80s.

Do you think the economic crisis that we could be facing could be on par with what happened in the late 70s, early 80s with the Iranian Revolution and the Iran Iraq conflict?

Yes, we could see similar price impacts and economic impacts.

If there is a prolonged disruption in Strait of Hormuz energy flows, how could people be personally impacted by this disruption to the energy supply?

So consumers are impacted because it's like a huge sudden tax increase.

And when you see a sudden increase in gasoline prices and they're rising now by a dime a day as we speak, this impacts not only the pocketbook, but

the psychology of the American consumer they just don't like to see also raises the price of everything we buy at the store and all the goods and services we consume because oil is embedded in the supply chain of producing and then transporting the stuff that we buy.

And finally, there's the financial market impact.

Trump knows he needs to keep the strait open.

He even offered an America backed risk insurance to all shipping lines to keep the, quote, free flow of energy.

With the midterms approaching, rising gas prices and higher inflation would not be the best look for Trump.

In my view, President Trump is acting on principle here because if this was just a political calculation, he would not want to start a war with Iran in an election year when his concern partly was getting oil prices down.

I conclude he actually means it when he says that he does not want to see Iran develop a nuclear weapons capability and the ability to strike with those weapons far afield of Iran.

You were a top adviser to President Bush.

What would your guidance be to President Trump today?

my advice has been, if you wish to shorten the oil price spike that will occur, you have got to, from the very earliest parts of the military operation, degrade those Iranian military capabilities that can make Hormuz unsafe for weeks.

The longer this conflict goes on, the more consumers could feel this in their everyday life unless the US And Israel find a way to keep the Strait of Hormuz open.

Subtitles ListPlay Video

If US produces so much oil, why does the Strait of Hormuz matter?

infrastructure

impact

conflict

surge