US Energy System Mitigates Global Supply Shock

The Strait of Hormuz closure and Iran war have sent global energy markets into turmoil, but the U.S. energy system has helped mitigate the shock by providing a cushion to supply disruptions.

According to the American Petroleum Institute (API), record American crude oil production and natural gas production, alongside rising liquefied natural gas exports, have been decades in the making due to investments worth billions of dollars annually.

The API notes that while these investments have helped stabilize global energy supply, they come at a cost for the U.S. energy system, with America's inventories of crude oil and petroleum products slumping below their five-year average for this time of year.

Crude oil prices have been kept in check by record U.S. oil output and fuel exports, as well as perpetual market hopes that a resolution to the conflict is imminent.