Why are your gas prices rising if the US barely imports any oil from the Strait of Hormuz?
President Donald Trump said the strait is "something that we don't need."
The Strait of Hormuz remains a thorny issue for the Trump administration's battle plans against Iran, despite the United States being one of the world's top oil producers and importing only a fraction of crude through the Strait compared to other countries.
In retaliation for the joint U.S.-Israel attacks on Iran that began on Feb. 28, Iran has put a stranglehold on the strait, demanding that foreign oil tankers get permission from the Islamic Republic before being allowed to pass through the critical maritime passage for the oil and shipping trades.
By choking off the strait -- the critical narrow passage between the southern coast of Iran and the northern coast of Oman that leads into the Arabian Sea -- Iran is putting enormous pressure on a global oil market that American consumers are already feeling at the gas pump.
Since the military conflict began, U.S. gas prices have gone up 81 cents to an average of $3.79 per gallon as of Tuesday, according to AAA.
Experts said the pump prices are expected to go higher as the conflict continues.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand, Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth, told ABC News.
"Unfortunately, even though the U.S. isn’t dependent upon that particular area for transportation and supply, domestic consumers in the U.S. are still hurt by the offsetting of the global supply and demand dynamic," Pappalardo said.
Tensions continue to escalate in the Strait of Hormuz. Last week, the Iranian military claimed responsibility for attacking oil tankers in the Persian Gulf and is suspected of attacking several other commercial ships hit in or near the Strait.
On Tuesday morning, an oil tanker off the coast of the United Arab Emirates near the Strait was struck by falling debris from the interception of a projectile, the U.K. Maritime Trade Operation (UKMTO) said in a warning to marine traffic. The tanker took minor damage while it was anchored about 23 nautical miles off the UAE port city of Fujairah on the southern side of the Strait, the UKMTO noted.
In 2024, an average of about 20 million barrels of oil per day passed through the strait, which amounts to roughly 20% of liquid petroleum consumed worldwide, according to the U.S. Energy Information Administration (EIA).
The vast majority of oil that passes through the strait is bound for Asian markets. Nearly 5 million barrels of oil arrived in China via the strait each day in 2024, the EIA said, while about 2 million barrels of oil per day ended up in India.
The U.S., on the other hand, only gets about 500,000 barrels of oil a day through the Strait of Hormuz.
For logistics and market reasons, the U.S. imported roughly 8 million barrels of oil per day as of July, predominantly from Canada, EIA data showed.
Due to an uptick in domestic oil output over recent years, the U.S. produces more oil than it consumes, meaning it could in theory rely entirely on domestic output. The nation has not built enough refineries to accommodate the uptick in production, however. The U.S. lacks the infrastructure necessary to process the type of light crude produced in most U.S. oil fields, so some refiners import heavy crude from abroad to make up the difference.
As the war in Iran entered its third week, President Donald Trump told reporters on Air Force One on Sunday night that the strait is "something that we don't need," arguing the U.S. does not depend on oil that comes through the passage.
Despite not relying on oil that comes through the strait, the U.S. is still subject to global market forces, Pappalardo said.
"The price of oil is determined by global supply dynamics. So, whether the U.S. is an importer or an exporter, or regardless of what comes through the Strait that's shut down, the price of oil is still set by global supply and demand," Pappalardo said.
Since the conflict in Iran has put a chokehold on the ships traversing the strait, the cost of crude on the global market jumped 45% to a little over $100 a barrel.
"On a technical basis, we don't rely on what comes through the Strait, but we do rely on the impact of the strait being shut down is having on global supply and demand," Pappalardo said.
Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, said, technically, the U.S. could stop selling oil internationally, but that would require an edict from the government and the cooperation of U.S. oil companies and oil trading countries like Canada and Mexico.
"U.S. companies are benefiting from the Strait of Hormuz shutdown. Our oil and gas companies are making money hand over fist from the exports that we do," Krishnamoorti told ABC News of why U.S. oil companies would likely not agree to any plans to stop selling on the global market.
Krishnamoorti said he suspects a lot of oil made it through the Strait before the war started and is currently on ships being delivered.
"But if this continues for another two or three weeks, we're going to see shortages in places like Europe, India and China," Krishnamoorti said.
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