Why record US oil output isn’t keeping gas prices low
We’re taking your comments and questions straight from YouTube and putting them to the test in this week’s Straight From You — where we sort fact from speculation and add context that viewers often miss.
This week’s topic: Does the increase in gas prices mean the U.S. isn’t producing enough oil?
You said:
The question:
Do rising gas prices prove the U.S. is producing too little oil?
SAN answer:
Not necessarily. Higher gas prices don’t automatically prove the U.S. is producing too little oil, because gas prices mostly track crude oil prices and crude is priced in a global market, not just an American one.
The U.S. Energy Information Administration says U.S. crude production rose 3% in 2025 to a record 13.6 million barrels per day.
But the national average for a gallon of regular gas hit $3.60 on Thursday, according to AAA. That’s up by more than 20% since the U.S. and Israel attacked Iran on Feb. 28 — a period when the widening conflict shook global energy markets.
What actually drives gas prices?
Gasoline prices are a mix of inputs. The biggest one is crude.
The price of crude oil accounted for about half the cost of a gallon of regular gasoline, with refining, distribution and taxes accounting for the rest, according to The New York Times.
EIA also says crude prices move with global supply and demand and can jump quickly when markets fear disruptions. It also says supply and demand are relatively slow to adjust in the short run, which can intensify price swings.
But we produce a lot — why doesn’t that protect us?
About 60% of the crude consumed in the U.S. is produced domestically, according to the American Fuel & Petrochemical Manufacturers, a trade association. Of the rest, more than two-thirds come from Canada and Mexico.
But because global crude benchmarks shape what U.S. refiners pay for oil, changes abroad can still push up pump prices here.
So, even with high domestic production, U.S. drivers are not insulated from global oil shocks. The Times reported that the United States exports large volumes of petroleum products but still imports millions of barrels of crude oil. That’s in part because many U.S. refineries are configured to process heavier, more sulfur-rich crude, while much domestic output is lighter sweet crude.
More drilling doesn’t happen overnight
Even if higher prices create incentives for new drilling in the U.S., production can’t snap higher instantly.
Reuters reported that Patterson-UTI CEO Andy Hendricks said a war-driven price spike would not automatically translate into more U.S. production without enough market stability to support drilling decisions. He also told Reuters that bringing new wells online can take more than half a year.
The market has also seen extreme price volatility, with U.S. crude futures hitting $119 a barrel early in the week and later settling at $83.45 on Tuesday after President Donald Trump predicted de-escalation. Hendricks said that kind of price swing makes it harder for producers to plan drilling and budget decisions.
Bottom line
Rising gas prices don’t prove the U.S. is producing too little oil. Instead, it shows how tightly U.S. prices remain connected to global crude markets, even when domestic production is high and more U.S. crude stays home for the strategic petroleum reserve and domestic refining.
Keep dropping comments, asking questions and SAN will tackle the biggest ones on Straight From You.
Ella Rae Greene, Editor In Chief
