(NewsNation) — Rising prices at the gas pump have become a topic of ire for many Americans as it hits them in the pocketbook.
From truckers to politicians, a demand for more domestic oil production has been pitched as a solution to the higher prices.
Denton Cinquegrana, chief analyst for Oil Price Information Service, answered viewer questions on 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
Cinquegrana: It’s not just a simple answer. It’s multifaceted. So you have to go back to 2020 and the pandemic. Companies were not making money, so they didn’t invest in future output. They didn’t invest in future production. We also had a series of poor margins, poor demand, so refineries either shut down or converted to making biofuels.
As far as the foreign oil concern is, yes, we do have plenty of oil here, but it’s a bit of a mismatch for what our refiners are geared to run.
Our refiners are very sophisticated, meaning they could take some of the grossest, nastiest … crude oil and turn that into usable products.
The United States produces a lot of light, sweet crude that our refiners are just about maxed out on using. And so we can’t really add that much more to it.
We do exchanges, and the biggest importer country that we import from is actually Canada. So our neighbors to the north provide us a lot of that crude oil, it goes to refineries in the Midwest and the Gulf Coast. It gets turned into gasoline, diesel and jet fuel.
It’s more than just what happened in Russia, quite frankly, even before that happened. We thought that it was gonna be a wild year for gas prices anyway.
Q: When am I to expect or even hope that gas prices will come down here on at least the Florida coast or the whole country?
Cinquegrana: With so much going on in the world, it’s hard to tell with certainty when prices are gonna come down. Now, in the very near term, we’re gonna see a little bit of relief. Now when I mean a little bit of relief, I mean, 4, 5, 10 cents.
We may have to wait until later in the year, into the fall when the formulation for gasoline changes and demand really starts to turn down because vacations are over, kids are back in school, things like that.
It’s going to take some time for some real relief. Now, does that mean we’re going back to like $2, and $3, probably not.
2022 is going to end up being a little bit of a gap year because in ’23 and beyond, there’s a lot more global refining capacity coming online in Africa, the Middle East and Asia and imports, exports, things will be moving around.
But again, at the end of the day, this is part of a global market, high gasoline prices are not just the United States issue. Canada is going on at the equivalent of eight Canadian dollars a gallon. Europe, you see the high prices there. So it’s not just United States issue. It’s global.
Watch the full interview with Denton Cinquegrana in the video player at the top of the page.