(NewsNation) – Rising prices at the gas pump have become a matter of ire for many Americans as it hits them in their wallets.
From truckers to politicians, a demand for more domestic oil production has been touted as a solution to rising prices.
Denton Cinquegrana, chief oil price news analyst, answered viewers’ questions about why America uses foreign oil during an appearance on “Morning in America.”
Q: Why are fuel prices so high? And why are we dependent on foreign oil when we have plenty of it under our feet? — Perry Freeman, Florida
Cinqugrane: It’s not just a simple answer. It is multifaceted. So we have to go back to 2020 and the pandemic. Companies were not making money, so they were not investing in future production. They did not invest in future production. We’ve also had a series of low margins, low demand, so refineries have closed or converted to make biofuels.
In terms of foreign oil, yes, we have a lot of oil here, but it’s a little out of step with what our refiners are supposed to tap into.
Our refiners are very sophisticated, which means they could take some of the coarsest, nastiest crude oil…and turn it into usable products.
The United States produces a lot of light, sweet crude that our refiners use at about the maximum. And so we can’t really add much more.
We trade, and the biggest importing country we import from is actually Canada. So our neighbors to the north supply us with a lot of that crude oil, which goes to refineries in the Midwest and the Gulf Coast. It is transformed into gasoline, diesel and jet fuel.
This is more than what happened in Russia, quite frankly, even before it happened. We thought it was going to be a crazy year for gas prices anyway.
Q: When should I expect or even hope that gas prices will drop here, at least on the Florida coast or across the country?
Cinqugrane: With so much going on in the world, it’s hard to say for sure when prices will drop. Now, in the very short term, we’re going to see some relief. Now, when I mean a little relief, I mean, 4, 5, 10 cents.
We may have to wait until later in the year, in the fall, when the formulation of gasoline changes and demand really starts to drop because the holidays are over, the children are back in school , things like that.
It will take time for real relief. Now, does that mean we’re going back to $2, and $3, probably not.
2022 is going to end up being a bit of a gap year because in 23 and beyond there’s a lot more global refining capacity online in Africa, the Middle East and Asia and imports, exports, things are going to move.
But again, ultimately this is part of a global market, high gas prices are not just the US problem. Canada is going for the equivalent of eight Canadian dollars per gallon. Europe, you see the high prices there. So it’s not just a problem for the United States. It’s global.
Watch the full Denton Cinquegrana interview in the video player at the top of the page.