U.S. Embassy in Saudi Arabia<\/a>, and the conflict widened. Iran also hit a major refinery in Saudi Arabia and a liquefied natural gas (LNG) facility in Qatar, halting flows of refined products and taking about 20% of the world\u2019s LNG supply offline.<\/p>\n\u201cWe keep seeing news of vessels being hit or refineries or pipelines, so the list is very long,\u201d Galimberti said. As a result, roughly 9 million barrels of oil per day are off the market because of facilities being hit or producers taking precautionary measures, he said. \u201cRight now, with all of this shut in, we are in a situation of extreme deficit.\u201d<\/p>\n
The U.S. is a net exporter of oil, but that does not mean it is immune to increases in the price of oil or gasoline, or that its producers can just make up the difference. <\/p>\n
Oil is traded on global markets, so even the oil produced in the U.S. has risen in price based on what’s happening in the Middle East. And for many American oil producers, “if you put more wells in the ground, there\u2019s about a six-month lag before you get that production uplift,” Salazar said.<\/p>\n
In addition, the U.S. can’t simply turn all of its crude oil into gasoline. That’s because most of the oil produced in the U.S. is light, sweet crude, and refineries on the East and West coasts are primarily designed to process heavier, sour crude. As a result, the U.S. exports some of its crude oil and imports some refined products such as gasoline.<\/p>\n
Jerry Dalpiaz of Covington, Louisiana, said he started filling up his cars and gas cans on \u201cthe day that they announced that the United States has started military operations against Iran” because he assumed gas prices would climb. <\/p>\n
\u201cI can weather the storm because I\u2019m in good financial position, but I feel sorry for my fellow citizens who are living paycheck to paycheck because they have to drive to get to work and they have to change their oil and all those things,\u201d Dalpiaz said. “And they need some relief and it doesn\u2019t seem to be coming anytime soon.\u201d<\/p>\n
Trump issued a plan Friday to insure losses up to approximately $20 billion in the Gulf region, aiming to restore confidence in maritime trade, help stabilize international commerce and support American and allied businesses operating in the Middle East.<\/p>\n
But some energy experts said extra insurance won’t solve the problem. <\/p>\n
\u201cThe problem is that in the oil trading, oil shipping world, people are worried about counterterrorism,\u201d said Amy Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, adding that they’re worried about automated drone speedboats, weapon-carrying, flying drones and mines or other devices. “In order for the United States to create the atmosphere that undoes the current bottleneck at the Strait of Hormuz, there has to be some credible demonstration of solutions to the counter-terrorism problem.\u201d<\/p>\n
Salazar wondered what the \u201cnew normal\u201d would look like if the Strait of Hormuz was effectively re-opened, and what effective security would look like. <\/p>\n
\u201cAll it takes is one individual with a RPG (rocket-propelled grenade) to stand on the shore and take out a tanker, right?\u201d Salazar said. \u201cAnd this is forever, do you know what I mean?\u201d<\/p>\n
___<\/p>\n
Associated Press journalists Amanda Swinhart in Middlebury, Vermont, Stephen Smith in Covington, Louisiana and Stan Choe in New York contributed to this report. <\/p>\n<\/div>\n
\n
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