Andrew Moran: The World Is Begging for America’s Oil

The Strait of Hormuz has been effectively closed for seven weeks. Tanker traffic has cratered, regional production has plummeted by the most on record, and global energy prices have rocketed. In the United States, businesses are paying higher input costs, and consumers feel like it’s 2022 again. But the broader US economy could be relatively unscathed by the war in Iran as the world rushes to buy America’s oil, providing a cushion for growth prospects.

Most Wanted: America’s Oil

Over the weekend, President Donald Trump touted the “massive numbers” of commercial oil and gas vessels that have traveled to the United States to fill ’er up on some good old Texas tea.

“Massive numbers of completely empty oil tankers, some of ‌the largest anywhere in the World, are heading, right now, to the United States to load up with the best and ‘sweetest’ oil and gas anywhere in the World,” Trump said in an April 11 Truth Social post.

Based on industry data, whether Lloyd’s List or MarineTraffic, the president is correct on this one. A fleet of tankers is traveling through the Cape of Good Hope in southern Africa, passing by Latin America, and parking at the Gulf of America. While this trip will add around 20 days to these ships’ voyages, it is the only option right now. Others are heading from Europe to purchase America’s oil.

Courtesy of MarineTraffic.com

Out of nowhere, the United States is now in control of approximately 20% of the world’s crude supply, which is on top of the large amount of liquefied natural gas (LNG) that is exported daily to the tune of 15 billion cubic feet.

But wait! There’s more.

Remember in January – yes, it feels like ancient times already! – when the US military performed a quick regime change in Venezuela? Well, Washington is now substantially in control of approximately 300 billion barrels of oil reserves. Although Venezuelan crude is heavy and thick, the United States is one of the few countries with refineries capable of processing this type of oil.

But wait! There’s even more.

On April 13, War Secretary Pete Hegseth met with Indonesian Defense Minister Sjafrie Sjamsoeddi to establish a “Major Defense Cooperation Partnership” that strengthens bilateral defense ties. This might seem like day-to-day Pentagon duties until you take a look around the Indo-Pacific region. North of Indonesia is the Strait of Malacca. This is the world’s largest oil chokepoint, handling about one-quarter of global maritime oil trade, equal to more than 23 million barrels per day. What’s more, 80% of China’s oil imports traverse through the Strait of Malacca.

America is producing almost 14 million barrels of oil per day. The United States has the world’s largest proven oil reserve in its backyard. It now has a military partnership in a vital waterway. If this were some concoction of the games Monopoly and Risk, President Trump would be winning as an oil tycoon overseeing more than one-third of the global oil trade.

Balancing Act

On the one hand, the US economy is far more insulated from global oil shocks than it was during the Iraq War, as it is a net petroleum exporter. The March, April, and May trade data, to be released later this summer and early fall, should yield fascinating economic insights into the Iranian conflict.

On the other hand, consumers still bear the brunt of higher gas prices. Private-sector data suggest that consumers continued to shop in March, even after excluding gasoline station transactions. Whether they can keep their wallets open this spring, even with handsome windfalls from the One Big Beautiful Bill’s tax refunds, will be a wild card for GDP numbers.

In the end, will this be a winning message for November’s midterm elections? It will be challenging to convince voters of a grand 4D chess scheme involving America’s oil and military prowess.

Andrew Moran, Economics Editor at LibertyNation.com. Andrew has written extensively on economics, business, and political subjects for the last decade. This article was first published HERE