Climate Depot chief Marc Morano joined Grant Stinchfield on Real America’s Voice to discuss U.S. energy production.

Gas prices aren’t climbing due to a blockade of the Strait of Hormuz. Rather, the effective disruption stems from insurance companies and financial speculators who are wagering that instability in the region will persist, creating market conditions that drive up costs regardless of whether the strait itself remains open. The New York Times also published a very good article describing this.

In financial markets, concern that oil shipments from the region won’t resume soon has lifted the price of crude oil — the largest factor in the cost of gasoline — about 40 percent in the same period.

The gains show just how vital the Persian Gulf region is to global energy supplies — and how interconnected global energy markets are, even if the United States produces plenty of oil. …

Oil, no matter where it comes from, is priced largely on global supply and demand. Prices can change quickly when supply is cut off by wars or weather, or if demand rises or falls.

The price that American refiners pay is underpinned by benchmarks set in the commodities markets. The two main ones are Brent and West Texas Intermediate, but there are many different oil prices across the globe — determined by where it’s produced and how far into the future it’s expected to be delivered.

PHOTO CREDIT: Pixabay