Why can't US set our own gas prices? It's complicated. | Opinion
Severing our ties to the global oil market would be neither practical nor desirable, and would likely come with some painful unintended consequences.
The average price for a gallon of regular gasoline surged past $4.50 in May. That’s up $1.63 per gallon since early February – before the United States and Israel launched a military campaign against Iran and Iran responded by effectively closing the Strait of Hormuz, a vital shipping route for Middle Eastern oil.
The hike in gas prices, already the steepest in decades, is costing the typical American household an extra $100 per month.
Pain at the pump has many Americans asking why events on the other side of the world are having such a significant impact here. After all, the United States recently became the world’s largest oil producer and a net exporter, meaning we produce more oil than we consume.
Why can’t we just disconnect from the global oil market and exclusively use American oil?
Severing our ties to the world market would be neither practical nor desirable, and would likely come with some painful unintended consequences.
Going it alone on gas prices sounds simple, but ...
Let’s start with the practical aspects.
The United States is connected to the global oil market through trade. We export and import massive amounts of crude oil and refined products like gasoline and diesel.
We do this primarily because not all oil is the same. The fracking boom that catapulted the United States to the top of the global oil producer rankings has unleashed a gusher of light, sweet crude oil (basically low in sulfur).
However, the massive U.S. refinery system is optimized to process heavier, sour grades of crude oil.
This creates an imbalance: We produce more light, sweet oil than we can efficiently process, and our refineries need more heavy, sour oil than we produce. So, we trade.
To disconnect from the global oil market, all this trade – imports and exports of crude oil and refined products – would need to be banned.
It’s not unheard of. U.S. crude oil exports were banned in 1975 following the OPEC oil embargo.
The ban was lifted in 2015 when the shale boom made it clear that America had more light, sweet oil than it could handle.
Yet, banning oil trade to achieve energy independence would be a disaster for the U.S. economy and unlikely to provide relief to consumers.
US benefits from being part of the global oil trade
For one thing, a ban on oil trade would rob the American economy of an increasingly positive source of incoming capital. Oil export revenues netted the United States $57.8 billion in 2025.
This may be cold comfort to drivers filling up at the pump, but over the long run, exports create real economic benefits, including jobs, reinvestment and tax revenue.
Perhaps more importantly, there are good reasons to believe that banning oil trade might not reduce U.S. prices over the long run.
The immediate impact would likely be a price crash as an oversupplied U.S. market rebalanced. This turmoil would be destructive for the industry and American workers – U.S. industry payrolls topped 670,000 in a recent survey.
Over time, however, as the industry contracted and drilling declined, so too would U.S. oil supplies. Eventually, prices would rise to match the cost of drilling the next well, which might not be much different than the global cost.
Finally, there are the unintended consequences, like how other countries might respond.
U.S. oil exports are a vital source of energy for the global economy. Banning exports would likely lead to higher long-run global oil prices and volatility, affecting every other nation in the world – nations that sell the United States things we need.
How might China respond? Would it be likely to continue exporting critical minerals and rare earth metals needed for advanced technologies?
It’s not hard to imagine a tit-for-tat set of export bans that leaves all nations far worse off, including the United States.
Government-imposed efforts toward economic self-sufficiency don’t have a great track record. Think Stalinist Russia or Maoist China.
There are other options, but you've heard them before
That doesn’t mean policymakers have no options for safeguarding American consumers and our economy against the volatility of the global oil market. In fact, it’s a worthy goal.
A better approach would focus on reducing oil demand. About two-thirds of the oil we use is in our sprawling transportation sector – cars, trucks and planes.
Electric vehicles, which are experiencing a surge in sales right now, don’t use oil. Other technologies, like hybrids, use far less oil than conventional gas guzzlers.
Investment in these technologies and incentives to speed adoption can help reduce the exposure of the U.S. economy to the global oil market. Policies to reduce our use of oil have worked before.
The U.S. economy uses just one-third the amount of oil per dollar of gross domestic product as it did in 1975. A major driver? Fuel economy standards.
Sam Ori is the executive director of the University of Chicago’s Institute for Climate and Sustainable Growth, as well as the Energy Policy Institute at the University of Chicago. He was formerly the executive director at Securing America’s Future Energy.