[Zhang Fei]

[Pity that we don’t produce our own oil anymore, and instead are totally dependent on OPEC for our energy needs.

Oh wait... ]

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We could produce all 20m barrels we use daily and still be hurt by foreign price hikes. As it is, we’re producing 10m bpd. That’s 10m bpd we need to import, the price of which is set for the most part by OPEC, which includes under its umbrella 73% of the world’s proven oil reserves. That’s why Trump complained about high oil prices. High input prices are detrimental to the economy. Now, if we produced 40m bpd, used 20m and exported 20m, we’d be in clover every time oil prices spiked. But that’s not our situation.

[Yo-Yo]

Now, if we produced 40m bpd, used 20m and exported 20m, we’d be in clover every time oil prices spiked. But that’s not our situation.

No, we would not be in clover. As you well know, domestic oil prices are not set based on the cost of production, but are set by the the world spot price.

If we produced 4mbpd and exported 20mbpd, oil producers would be in clover because they would be getting more money for their product, but the U.S. consumer would still also be paying the same higher price, just as they would if it all were imported at the same price.

The difference between now and 1972, however, is if OPEC cuts off supply, we have domestic production that can meet critical demand use. In 1972 we did not.