Let me make sure I understand this. The United States produces more crude oil than any country on Earth. Not Saudi Arabia. Not Russia. Us. In 2025, the United States produced an average of 13.6 million barrels of crude oil every single day, the highest annual production level ever recorded by any country, and we have been the world’s largest crude oil producer since 2018.
So naturally, I had a question.
If we are producing more oil than anybody else, how in the hell can a Ukrainian drone hit a refinery in Russia and eventually make life more expensive for somebody driving to work in Texas?
At first glance, that does not make much sense. If Russia has a problem, you would think that should be Russia’s problem. If a refinery gets knocked offline thousands of miles away, you would think the pain should stay thousands of miles away. But once I started digging into how the oil and fuel markets actually work, I realized that what politicians call “American energy independence” is a lot more complicated than the phrase makes it sound.
WE HAVE OIL. THAT DOESN’T MEAN WE CONTROL THE PRICE.
Most of us hear that America produces more oil than anybody else and naturally assume that should protect us when something goes wrong overseas. The problem is that American oil does not exist inside some protected American bubble. Oil is traded in a global market, and so are finished fuels like diesel and gasoline. What we pay here at home can be affected by crude prices, refinery shutdowns, shipping costs, inventories, wars, sanctions, storms, and disruptions happening on the other side of the world.
We are seeing that right now with Russia. Ukraine has repeatedly attacked Russian oil refineries and other energy infrastructure, taking some facilities offline or reducing their ability to operate. Russia is a major supplier of fuel to the world, so when its refineries cannot produce as much diesel, that fuel does not simply disappear without consequences. The people and countries that still need it start looking somewhere else, and some of them start looking toward the United States.
That matters because diesel is not just something somebody puts in a pickup truck. Diesel moves freight, powers farm equipment, runs construction machinery, and helps move an enormous amount of what eventually ends up on store shelves. When diesel gets expensive, the pain does not stay at the gas station because higher transportation costs can eventually work their way into the prices of the things the rest of us buy.
BUT DIDN’T WE USED TO KEEP OUR OIL HERE?
Sort of, and this is where the history gets interesting.
After the Arab oil embargo and energy crisis of the 1970s, the United States imposed major restrictions on exporting domestically produced crude oil. The thinking was not difficult to understand. America had just been through an energy crisis, so keeping more American crude available for the American market seemed like a matter of national energy security.
Those restrictions remained in place for roughly forty years, although calling them a complete ban would not be accurate because there were exceptions. In December 2015, Congress changed that policy and allowed most U.S. crude oil to be exported without the licensing restrictions that had previously existed.
The politics behind that decision were more complicated than simply saying Obama lifted the ban. Earlier in 2015, the Obama administration opposed a standalone House bill that would have lifted the restrictions and indicated that the president’s advisers would recommend a veto. The final change came later as part of a much larger year-end spending agreement containing priorities negotiated by both parties.
There is another detail that matters even more to what is happening today, and it is one of the reasons I wanted to dig into this instead of simply repeating something I saw online.
CRUDE OIL AND DIESEL ARE NOT THE SAME THING.
The 2015 change dealt primarily with crude oil, the stuff that comes out of the ground. Crude oil still has to go through a refinery before it becomes gasoline, diesel, jet fuel, and the other products we actually use. Before Congress changed the crude export rules in 2015, the United States was already allowed to export refined petroleum products. The Energy Information Administration said at the time that existing law allowed unlimited exports of petroleum products while crude oil remained subject to licensing restrictions.
That distinction completely changed the way I looked at this because today’s problem is not simply about whether the world has enough crude oil. It is also about whether the world’s refineries can turn enough of that crude into the diesel and other finished fuels everybody needs.
Think about having a warehouse full of wheat while bakeries all over the world start shutting down. You can stand in front of that warehouse all day saying, “Look how much wheat we have,” but people still need bread. Having plenty of the raw material does not automatically mean you have enough of the finished product.
That is essentially the problem we are seeing with diesel. The United States is producing enormous amounts of crude oil, and American refineries are running extremely hard. EIA reported this month that U.S. refineries were operating at about 97 percent utilization while domestic distillate production had reached its highest level since 2019. Yet U.S. diesel inventories were still about 13 percent below their five-year seasonal average because global supply remained tight and demand for American exports remained strong.
So yes, America has a tremendous amount of crude oil. That does not automatically solve a global shortage of diesel.
AND THAT IS WHY A REFINERY IN RUSSIA CAN MATTER IN TEXAS.
When Russian refining capacity gets knocked offline, the world loses some of the diesel and other fuel those refineries would have produced. Buyers still need that fuel, so they begin searching for replacement supplies, and some of those replacement barrels come from American refineries.
That does not mean a foreign buyer simply pulls up to America and outbids you for your gallon of diesel. The real market is considerably more complicated than that because contracts, pipelines, shipping costs, refinery configurations, storage levels, and geography all matter. But the larger point remains: American fuel is part of a global market, and when global supply becomes tight, demand for American exports can increase.
EIA says that is happening now. Reduced refining activity in Russia, China, and the Middle East has tightened global diesel supplies, increased international prices, and increased demand for U.S. diesel exports. At the same time, American inventories have fallen below normal seasonal levels, helping drive refining margins and retail diesel prices higher.
That is how something happening thousands of miles away can eventually find its way onto the sign outside your neighborhood gas station.
AND THIS IS NOT JUST ABOUT RUSSIA.
Russia is only part of the pressure on the market. The Middle East has also experienced serious energy disruptions, shipping concerns, and attacks on infrastructure. Oil prices can move quickly whenever those disruptions threaten supply routes or refinery operations because crude oil remains one of the largest ingredients in the price of diesel and gasoline before refining margins, transportation costs, taxes, and everything else that eventually becomes part of the price at the pump.
This is also why President Donald Trump’s recent comments about Ukraine received so much attention. Trump publicly urged Ukrainian President Volodymyr Zelenskyy to stop striking Russian diesel infrastructure and connected those attacks to global diesel shortages and high fuel prices. Whatever anybody thinks about the larger war or the politics surrounding it, the statement illustrates something important: the relationship between damaged Russian refining capacity and fuel prices outside Russia is part of the current energy discussion at the highest levels of government.
SOMEBODY IS MAKING MONEY FROM ALL OF THIS.
There is another part of this story that cannot be ignored. While consumers are feeling higher fuel prices, some of America’s largest oil companies are having extremely profitable quarters.
Chevron reported $12.1 billion in earnings for the second quarter of 2026, while ExxonMobil reported $14.5 billion during the same quarter. Together, that is roughly $27 billion in earnings in three months. ExxonMobil’s $14.5 billion alone works out to around $160 million a day across the quarter.
Those numbers do not mean Chevron or Exxon created the wars, caused refinery shortages, or personally decided what somebody in Texas should pay for a gallon of diesel. Making that claim would be an enormous leap beyond the evidence. What the numbers do show is that some of the same market conditions squeezing consumers can also be extremely profitable for companies producing and refining oil.
Exxon reported that its increase in earnings was driven in part by higher prices and stronger margins, while reporting on the industry showed that high oil prices and elevated refining margins during a period of major global refining disruption contributed significantly to the companies’ results. That matters because refining margins are one of the pieces of this conversation most people never hear about.
When there is plenty of crude oil but not enough refinery capacity to turn it into the fuel everybody needs, the value of that refining capacity rises. The difference between what a refinery pays for crude and what it can sell diesel or gasoline for can become much larger. EIA says tight global diesel supplies and unusually high refining margins are contributing to very high diesel prices in the United States.
There is no contradiction in consumers getting squeezed while companies operating in the same market make more money. Both can happen at exactly the same time.
SO WHAT DOES “ENERGY INDEPENDENCE” REALLY MEAN?
This is the part I think we need to talk about more honestly because politicians from both parties love the phrase “energy independence.” It sounds simple: produce more energy here, depend less on somebody else, and America will be protected from whatever happens overseas.
There is truth in part of that. Producing more of our own energy matters. Domestic production can strengthen supply security, support jobs, and reduce dependence on imports. But producing more oil than anybody else does not mean America gets to ignore the world price because we are still participating in an international market.
American companies sell crude oil overseas. American refineries sell diesel and other petroleum products overseas. American refineries also import crude oil because different facilities are designed to process different types of crude more efficiently. Prices move as producers, refiners, traders, shippers, businesses, governments, and consumers respond to supply and demand around the world.
That is why America can set oil-production records while Americans still pay more when war damages energy infrastructure somewhere else.
Here is another piece that surprised me. Before the 2015 crude export restrictions were lifted, EIA studied what could happen if the rules changed. In scenarios where lifting the restrictions increased U.S. crude production, the agency projected that allowing crude exports could actually result in slightly lower gasoline prices because American fuel prices are closely connected to global crude prices.
In other words, simply bringing the old crude export restrictions back would not automatically solve what is happening at today’s diesel pump, especially when refined products like diesel were already being exported before the crude restrictions were lifted.
That is why this story is bigger than one law, one president, or one political party.
AND THAT MAY BE THE MOST IMPORTANT PART OF ALL OF THIS.
When I first saw the claim that America produces more oil than anybody in the world while Americans are paying more because of events in Russia, my first reaction was probably the same as a lot of people: How in the hell does that make sense?
After digging into it, I understand the contradiction a lot better because it really is not a contradiction at all. America can have enormous amounts of crude oil while the world is short on diesel. We can produce more crude oil than anybody else while participating in a global market where events in Russia, Ukraine, Iran, Saudi Arabia, or anywhere else that affects major energy infrastructure can influence prices here. American refineries can be running nearly as hard as they can while foreign buyers are also looking to those same refineries for fuel, and American consumers can be paying painful prices at the pump while companies producing and refining that fuel report enormous profits. All of those things can be true at the same time.
That is why I think the conversation has to move beyond the easy political slogans. Simply yelling “drill more” does not explain the entire problem, blaming exports does not explain the entire problem either, and blaming one president for every movement in the price of oil ignores the reality that we are talking about a worldwide market influenced by wars, refinery capacity, transportation, inventories, production, demand, and decisions being made thousands of miles from the gas station where you fill up your truck.
After all of this, the question I am left with is actually pretty simple. If the United States produces more crude oil than any country on Earth, how much protection should that give American consumers when the rest of the world’s energy market goes sideways?
Because what we are learning right now is that having the oil and controlling what we pay for it are two very different things.
