The Myth of American Energy Independence
Make America Drained Again
The United States has been a net energy exporter since 2019, meaning that it has been selling more energy abroad (in terms of Btu) than it imported for more than six years now. However, that doesn’t mean that the US has become import independent—quite to the contrary. In 2024, for example, America produced 13.2 million barrels of oil a day1 on average and imported an additional 6.6 million barrels on top. At the same time only 4.1 million barrels a day were exported. In strict barrel to barrel terms the US was a net importer of crude oil in 2024, and still is to this very day. However, with the arrival of an armada of tankers to US shores in April-May, this is about to change… To the detriment of all US citizens. Say goodbye to moderate price increases (compared to the rest of the world) and also to US strategic petroleum reserves. America is about to be sold out.
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In order to understand why is that so, we have to take a step back first, and understand why one US president after the other marketed America to be energy independent. Take notice of the use of the word: energy—not oil. You see, what made the States a net energy exporter, is the addition of NGLs or or Natural Gas Liquids at a whopping 5.9 million barrels a day to the mix. And here comes the issue. Natural gas liquids are not oil—not by a long shot—but a byproduct of natural gas production. These molecules—such as ethane, propane, butane, isobutane, and pentane—form the “wet” portion of the gas extracted from Earth. NGLs are heavier and more dense than methane (the main component of natural gas), but much-much lighter and infinitely more volatile than oil. So while these “hydrocarbon gas liquids”—as they’re called after processing—can be used as inputs for petrochemical plants, burned for space heating and cooking; they can only be mixed into gasoline to a very limited amount and cannot be used to make more diesel, jet or heavy shipping fuel.
See, not all what is marketed as “petroleum” has the same utility. When we talk about the fuels moving, feeding, mining and building the world—mostly diesel (or “distillate fuel oil” as the EIA likes to call it), jet, and bunker fuel—NGL’s are practically useless. Sure, you can make a lot of money on these molecules by turning them into plastics, or by filling them into fancy camping gas stoves, but you cannot deliver more goods or harvest more crops using them. The hard truth is, that the US consumes 16.7 million barrels of actual road, shipping and aviation fuel, but produces only 13.2-13.6 million barrels of oil every day. America is even more oil import dependent than what the headlines figures suggest.
A similar pattern emerges when we compare the various crude oil blends out there. While, for example, light and ultra light crude from Texas yields over 52% gasoline, refineries need to use more heavier oils to produce jet, diesel and heavy fuel oils needed to keep the economy humming. On top of that US refineries themselves are designed to take heavier, more sour (high sulfur) grades than the light sweet (low sulfur) crude American fields produce. This is why the US has to export its light oil and natural gas liquids (of which it has too much of) while, at the same time, has to import heavy crude (which it doesn’t have enough of) from Canada, Venezuela, and Saudi Arabia. (And this is why securing Venezuelan crude shipments were crucial before a war on Iran could have been launched in the first place.)
The imbalance between the types of oil the US actually needs and what it actually produces, in combination with a massive refining overcapacity, has made America one of the world’s top refined fuel exporter. People bring in their crude, and US refiners turn them into gasoline, diesel and jet fuel. Fuels, the rest of the world is literally starving for after America launched it’s ill-advised, unprovoked war of aggression on Iran—which it now can’t seem to be able to get itself out of.
However, the chickens—in the form of an armada of very large crude carriers (VLCCs)—are now coming home to roost. 121 empty oil tankers are currently steaming toward the US as we speak, with 68 of them classified as VLCCs, each capable of hauling up to 2 million barrels of oil. That’s 160-190 million (empty) barrels, depending on how you count it. At the same time—and as a result of the madness concerning the Strait of Hormuz—imports to the US dropped by more than 1 million barrels to 5.3 million barrels a day. Let’s run the numbers one last time. Domestic oil production in April was 13.6 million barrels a day. Imports were at 5.3, which equals 18.9 million barrels of supply, while demand for actual fuel remained at around 16.7 million barrels a day. Hmm, that leaves us with little more than 2 million barrels—or exactly one tanker’s worth of—crude / refined products to be exported a day. The rest of the ships must be coming for the millions of barrels of NGLs even Americans can’t find a use of… Um, right? According to an April 16 article from Reuters:
“Net imports of crude oil, or the difference between imports and exports, narrowed to 66,000 barrels per day last week, the lowest on record in weekly data that goes back to 2001, according to U.S. government data released on Wednesday, while exports climbed to 5.2 million bpd, the highest in seven months.” […] “About 2.4 million bpd, or some 47% of U.S. exports last week sailed toward Europe, according to ship tracking service Kpler. Around 1.49 million bpd, or about 37%, headed to Asia, up from 30% a year ago. Top buyers included the Netherlands, Japan, France, Germany and South Korea.”
Well, that 5.2 million barrel a day export figure is way more than the 2 million barrels of excess supply, which makes one wonder where will those extra millions of barrels of oil be coming from? Well, not from increased production, as drilling activity across America slows despite high oil prices. Shale producers grapple with geopolitical and price uncertainties, a lack of prime acreage, on top of an unfolding oilfield service crunch. In other words: America grapples with the realities of a post-peak shale oil world. The number of active oil drilling rigs, as a result, just keeps declining: now standing at 410, which is 63 (or 13%) below the same time last year… Like it or not, the only logical source of these extra millions of barrels will be—drum-roll—the Strategic Petroleum Reserve (SPR) and actual refined fuel stockpiles. Make America (and the world) Drained Again! I’m sure oil majors will be thrilled.2
According to Amrita Sen, co-founder and director of market intelligence at Energy Aspects, such high US exports and a protracted conflict could reduce inventories in the key US Gulf Coast regional market to critically low levels by the end of June, even after accounting for the approved releases from the US Strategic Petroleum Reserve. “To avoid shortages in the US, policymakers will have to accept a higher price or consider dramatic market interventions like restricting exports which would have the perverse impact of shutting down refinery operations and upstream production along the US Gulf Coast, as most of the production there is geared for exports,” Sen reckons.
Remember the thing I explained earlier? US shale oil is light and sweet, in other words: unsuitable for US refineries at such high quantities. Oh, and by the way, it’s similarly unfitting for exports—these barrels cannot hope to replace the 11-13 million missing more heavier blends from the Persian Gulf—no matter how the POTUS keeps marketing them. But I guess it’s still better than nothing… A release of medium sour crude from the Strategic Petroleum Reserve will nevertheless push even more light, low sulfur US crude grades out for export, as US refineries will need to use those more heavier grades for domestic purposes—especially in light of the 1 million barrels of imports missing in action. This will, I wager, weigh down on the selling price of American crude while, at the same time, push up the price of refined fuels (gasoline, diesel, jet fuel)—both at home, and for export.3 By some estimates, as a result, US commercial crude storage might fall below 400 million barrels, approaching the operational minimum of 370-380 million barrels, by the end of July (including an estimated SPR release total of 139 million barrels). This would not only bring markets to the breaking point, but also trigger some pretty heavy restrictive measures.
Beyond the pricing and supply chaos, the filling of this unprecedented fleet of tankers arriving to US coasts will cause, this event will also hamper the return to normalcy, even if the strait were to open up tomorrow. The 68 VLCCs alone represent a potential capacity of 136 million barrels—roughly equivalent to 27 days of current US export volumes at 5 mb/d levels. Logistics, transit, and scheduling will spread this 27 days out over weeks to months, limited by pipeline capacity and vessel availability.4 And it’s not just whether reserves will last, or how fast these ships can be loaded. Global shipping is a highly choreographed business with a limited number of ships and loooong transit times. It takes weeks and months for ships to re-route: VLCCs are big, slow behemoths covering planetary distances at 12 to 15 knots (roughly 14–17 mph or 22–28 km/h). So even if Hormuz were to fully reopen, the massive rerouting of ships underway alone will prevent the return of previous flows. As a report by HFI research found:
“The time it takes for these VLCCs to load will be 6-8 weeks. Transit time to Asia will be another 45-50 days. To offload and go back through the Strait of Hormuz would be another 20-25 days. In total, we will not see meaningful tanker traffic back in the Strait of Hormuz from this entourage for at least 3 months.”
Not that oil flows from West Asia could return anytime soon anyway. As Fatih Birol, executive director of the International Energy Agency, told recently: “We estimate that it would take about two years for the Gulf region to reach pre-war levels again.” War damage to Gulf energy infrastructure already amounts to $58 billion, and we are still far away from the end of the war. And to make matters worse, epair efforts face major bottlenecks in equipment and skilled labor, risking wider delays across global energy projects and extending the supply crunch.
The hole, the world economy has found itself in, is just getting deeper and deeper with every day. And while the myth of American energy independence helped to mask the US’s exposure to global market dynamics, that mask is now falling. A massive drain on American crude oil and product inventories is coming, with all its repercussions from price hikes to export bans — leaving US shale drillers potentially unable to sell their stuff. Too bad, that the price of this ill-advised war will be payed by the average citizen, and perhaps paradoxically, America’s own oil industry.
Until next time,
B
Thank you for reading The Honest Sorcerer. If you value this article or any others please share and consider a subscription, or perhaps buying a virtual coffee. At the same time allow me to express my eternal gratitude to those who already support my work — without you this site could not exist.
US oil production has peaked in October, 2025 at 13.86 mb/d and is expected to stay somewhat below that level throughout 2026 and 2027. According to the latest EIA data, US crude oil production averaged 13.596 mb/d during the week ending April 10—266,000 bpd under the all-time high.
Another lens to view this unprecedented sale of oil reserves is through stock markets. Windfall profits from high oil prices and record exports will lead to record dividend pay-outs to shareholders of oil majors—money which will be reinvested into the stock market to avoid taxation. Stocks will thus keep rallying, keeping the investor class happy and leaving everyone else much poorer.
Diesel markets are structurally tighter, with lower inventories and less flexibility to absorb supply shocks than gasoline. Refining limitations also prevent rapid increases in diesel output, even as US refiners are ramping up gasoline production ahead of the high-demand summer driving season. They can’t substantially shift production to diesel.
Although, the Gulf Coast offers around 7 million barrels per day of crude oil export capacity—of which 3.9 was utilized in January 2026—the US is unlikely to export more than 6 mb/d for a prolonged period of time due to logistic limitations. (The previous record was 5.6 mb/d, set in 2023.) Source: Reuters
Glad to read this analysis. Since I have been an environmentalist since 1970, I am hoping all the newbies finally realize you CANNOT have a clean world without reducing fossil fuel consumption. AND this reduction in fossil fuel consumption, whether voluntary or from supply destruction, will come at a cost to affluent western lifestyles. Oops. And if you have been believing all the eco-modernist hype, the greenwashing, the astorturfing, the nonsense the tech bros are spewing out, and all the nationalist paranoia that makes you want to buy a firearm for protection - Shame on You! Hopefully you now see that the peasant lifestyle is the way to safety as the billionaires burn the world down in search of short-term profit. If YOU would have listened to US fifty-five years ago, WE wouldn't be in trouble NOW.
“Price hikes and export bans” may be the least of our worries. This article implicitly suggests many other longer-term “repercussions”. If the world cannot find enough of the ‘right’ crude oil, or if we ‘stop fossil fuels’, then many other things stop or slow dramatically – e.g., food production, just-in-time supply chains, bulk transportation, provisioning of large cities, etc., resulting in factory shutdowns, massive unemployment, mass migrations, civil unrest, economic implosion (which would be a good thing were it a planned orderly contraction over decades) and suffering or death for many millions (billions?). On the other hand, if the Israel/US vs Iran war ends, things get back to normal in a few months, and the world remains addicted to fossil fuels, then we risk runaway global heating, major hits on food production, large areas rendered uninhabitable, abandonment of large cities, mass migrations, economic implosion, geopolitical chaos and suffering or death for many millions (billions?). Interesting, too, that the green renewable energy (electricity, actually) doesn’t much figure as a way out of any such scenario.