“Do you want oil prices to stay above $60? You actually want them to stay above $60, but below $90,” says Tommy Norris, the character played by Billy Bob Thornton in the popular television series Landman, one of Paramount’s most successful productions, based on the adventures of oil industry workers in Texas. “Don’t get me wrong: at 90 we’re still making money hand over fist, but gasoline shoots up above $3.50 a gallon. And that starts to pinch the pocket,” continues Bob Thornton, in one of the series’ most viralized scenes on social media in recent weeks. “If it reaches $100, every product in the United States has to readjust its price. $78 a barrel. That’s almost perfect. Yes, it generates enough profit to keep exploring. But it doesn’t hurt as much at the pump.” The dialogue, written by one of Hollywood’s best screenwriters, Taylor Sheridan, perfectly reflects the current situation of the American oil industry.
Confusion over the status of the Strait of Hormuz, a strategic passage that has been blocked for six weeks, contributes to adding tension to the energy market. This Saturday, Iranian authorities have again closed the waterway after agreeing on Friday to reopen the passage following the ceasefire agreement between Israel and Lebanon. But the situation reversed after the US stance to keep Iranian ports blocked until a definitive agreement is reached.
Trump’s war in Iran has caused a nascent energy crisis, with an unprecedented interruption of global crude supply. More than 11,000 kilometers separate Washington from the Strait of Hormuz, but the prices set by the financial market for oil globally also govern in the United States, for better or worse. While its oil industry gets richer, the energy bill for Americans and the rest of the world has skyrocketed. US inflation in March has already risen to 3.3%, the largest monthly jump in four years, and gasoline is being paid at the highest price since August 2022, shortly after the Russian invasion of Ukraine. A gallon of gasoline (about 3.78 liters) costs more than four dollars, about 35% more than before the bombings in the Persian Gulf. Diesel is nearing its historical record of four years ago and is trading above $5.5 a gallon. Oil scarcity due to the war in the Middle East has caused an escalation in fuel prices. Could the United States, the world’s largest oil producer, then increase its production to try to compensate for the loss of supply from Hormuz? Can the world’s largest crude producer do anything to lower prices?
At the end of March, the US president boasted to the world about the US’s power in oil production. “First, buy from the United States, we have plenty. And second, arm yourselves with courage, go to the Strait and TAKE IT! You will have to learn to defend yourselves,” Trump boasted on his social network.
The United States is the world’s largest crude producer: its production reached a record 5 billion barrels a year in 2025, more than 13 million a day, thanks to the development over the last decade of the fracking or hydraulic fracturing industry, the extraction technique that consists of injecting a mixture of water, sand, and chemicals into rock formations to extract shale, rich in oil and natural gas. This technique has allowed the US to make a big leap in production in the last two decades. If other components such as ethanol or liquefied petroleum gases are added, the production of the US industry rises to 21.2 million barrels per day, according to data from the International Energy Agency, double that of Russia or Saudi Arabia.
But, contrary to what Trump preached with his well-known slogan of drill, baby, drill, (drill, baby, drill), with which he promised Americans cheap oil, the US’s capacity to increase production is limited. Iran announced a new closure of the Strait of Hormuz this Saturday, but even when it reopens, the normalization of the energy market will take months to arrive. As Kristalina Georgieva, managing director of the IMF, explained this week: “A tanker is a slow-moving ship. It will take 40 days to reach Fiji. Therefore, we must be prepared for the impact of these supply disruptions to worsen in the coming weeks.” The consequences of the conflict will last for months, even if the war ends in the coming days.
“All previous energy crises involved partial disruptions,” recalls Modell, who heads one of the most important economic intelligence companies in the energy sector. “The Arab embargo of 1973 eliminated approximately four to five million barrels per day. The Iranian Revolution of 1979 suppressed four to six million barrels. The Gulf War of 1990 eliminated about four million. The current crisis has eliminated around 13 million barrels per day. There is no historical precedent for a supply shock of this magnitude,” he warns.
“The United States produces a lot of oil right now, but of a very specific type, a very light crude. And most of the country’s refineries are for heavier crude, which it needs to import from countries like Venezuela. To the question of whether the US can rapidly increase its production with prices now so high, the answer is no,” explains Jorge León, vice president and head of geopolitical analysis at Rystad Energy consultancy. At least not to the extent necessary to compensate for the loss of supply that the blocking of the Strait of Hormuz has entailed so far, estimated at about 10 million barrels per day, not counting its derived products.
“The United States is the world’s largest oil producer, but it cannot drill more to get out of this crisis,” explains Scott Modell, CEO of Rapidan Energy, one of the major energy consultancies. “Shale fields are already operating near their maximum capacity, and the crude coming out of the Permian Basin is of insufficient quality for many US refineries,” he notes.
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The International Energy Agency estimates that the US could additionally increase its crude supply by about 250,000 barrels per day by the end of the year, but only if the oil industry of fracking were willing to intensify its activity. Experts estimate that hydraulic fracturing is only profitable with prices above $62 to $70, according to the Dallas Federal Reserve. “A few years ago, fracking was very sensitive to oil prices: when the price went up, production increased a lot. But once the wells have matured, and we’ve had 15 years of fracking production, it’s much more inelastic,” adds León. US oil companies are rubbing their hands but, like the protagonists of Landman, they also don’t want oil above $100 that could destroy demand, end investment, and increase uncertainty, “realities that no energy company desires,” explains Modell.
Opening new fracking wells is not easy. Fifteen years ago, when the fever for this technique began, dozens of small American companies jumped into the business, but in subsequent years prices fell and caused many of them to disappear; others were absorbed by oil giants like Exxon or Chevron. Industry executives refer to that era to urge caution before rushing to open new wells. For now, they are not in a hurry to increase the production of oil that leaves them less margin. Without guarantees of high prices, they will not accelerate new investments, as it will take almost a year for them to be at full capacity.
According to energy consultancy Baker Hughes, the United States has 545 active oil and gas drilling rigs, almost 7% fewer than last year. Most are in the Permian Basin, a large area rich in oil resources, which extends between Texas and New Mexico. “In the previous cycle, shale provided a quick supply response when prices rose, but that flexibility is now more limited,” says Mark Lacey, head of thematic equity at Schroders.
For the IEA, “beyond infrastructure, operational and organizational limitations also hinder activity“. The agency also hits the nail on the head by stating that ”the United States is the country among developed economies where market prices are most directly and fully passed on to retail prices“. Gasoline and diesel prices have risen by 40% and 52%, respectively, in the last two and a half months, from mid-February, just before the start of hostilities, until this Friday, according to data from the American Automobile Association (AAA). Quite a paradox for the world’s largest oil producer.
It was less than two months ago that Donald Trump boasted of having lowered gasoline prices to historic lows during his speech on the State of the Union. Now it has become a headache for him. The rise in fuel prices is a delicate issue in the United States. Its price is inversely proportional to the president’s approval rating in polls. It is a galvanizer of social discontent in a very extensive country with a lot of travel. Trump is worried. With less than six months until the midterm elections, where a good part of his political power for the rest of the legislature is at stake, his approval rating in the polls has fallen to an all-time low. In this complicated scenario, he has sent contradictory messages about fuel prices. On the one hand, he has said that Americans would have to bear the high cost of achieving peace in Iran, and on the other, he has indicated that gasoline prices will drop quickly once the war ends.
The drill, baby, drill that Trump preached in the election campaign that led him to re-election in 2024 is not materializing, nor is the country’s full oil autonomy. The US needs to import heavy crude from countries like Mexico, Canada, and Venezuela to supply its refineries, which predate fracking technology. Around 40% of the United States’ refining capacity comes from these imports, more than half of which is Canadian crude. In this context, the heavy oil it is importing from Venezuela is important.
The US produced more than 13 million barrels of crude daily in 2025 but imported another 6.2 million, according to EIA (U.S. Energy Information Administration) data. A leader in its own crude production, though insufficient for self-sufficiency, the US’s dependence on crude from Gulf countries is very slight. The US economy also benefits from its strength and a much less intensive oil consumption than in the past.
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