u/CouldBeLessDepressed

I keep seeing this over and over and over. Ok, yea, the USA is a net exporter and we produce a ton of WTI and we get our heavy crude from our own hemisphere. I'm right there with you folks so far. I just have a few questions:

1- How does that insulate the USA from a global oil crisis? Can someone give me an ELI5 here in particular? Because, and if I'm wrong here please explain to me what's actually correct- it doesn't matter who pumps the oil or from where, it all goes into the same market. Right? It's all 1 gigantic swimming pool filled with oil(s) and we all purchase our oil out of it and pump our oil into it. 1 market. 1 way in 1 way out. So, with the whole Hormuz cluster, ~20% of the constant flow to keep that pool at the level where it is/was is *poof* gone. And our collective production before the war was such that that pool would stay as steady as possible. IOW supply and demand tried to stay pretty close together. But now there's a 20% hole in that supply. So how does the USA producing so much oil help the USA in all of this, really? Obviously the companies still able to dump their inventory freely into the pool are gonna profit. That's a no-brainer. But how does that insulate or save any other follow on industry in the petrochemical world, even and especially in the USA?

I'm losing my mind here. Genuinely, where do you folks think all this US production goes? Is there some side-market that some of us aren't aware of here? Last I checked we haven't nationalized anything. So, every drop we produce is going to right into that 1 giant pool that still has a 20% sized reduction in supply. Right? If everything USA produces goes to the global market, how does that insulate the USA? How? Is there some kind of wormhole for US petrochem businesses to bypass the entire rest of the Earth that is waiting in line at the 1 singular oil market to buy their oil? And not just that, but also buy that oil for what is inevitably going to be less than the going rate on the global market. Do the US companies pumping oil also suddenly hate money?

Second question. Say the current federal government, and the administration heading it, which we all know is famous for consistently refusing to cater to billionaires (/s), actually pulls the trigger and nationalizes local production. (and they wont. there's nothing anyone could say to convince me otherwise. They'll let this ship sink straight to the bottom with all of us on it before they even entertain the idea without laughing) Then what? Is there some magical exchange already put together, ready for businesses to place their emergency orders for oil before production lines shut down? I mean we all know supply lines are historically super flexible. Hell I never once ran out of TP during covid /s.

And then, who's going to refine that WTI? Point to me on a map of the USA where those shiny new light crude refineries are. And are the producers in Canada and Venezuela just gonna throw the USA a bone to keep the heavy crude we actually use at a reasonable price? Why would they do that? Is it the tariffs that garnered us a ton of good will or the political leaders we kidnapped? Which part of the last 15 months suggests that anyone in the world is going to have the USA's back? And not just good will and loyalty here, but so much good will and loyalty that a heavy crude producer will decide they suddenly hate money.

Sarcasm aside, what am I missing here? Is there some unspoken production capacity we've been sitting on to make up for a 20% hit to the entire market? Was there some tap that was sitting closed this whole time just waiting for it's magic moment to open and shine for the good ol' US of A?

I realize this might come off a bit snarky. And..... yea it probably is. Because what in the actual F yall? How is there not a mass panic? I get it, the prices are being kept low so things can function...... right now. But that just makes everything worse in the end when operating inventories drop low enough that everything grinds to a halt, does it not?

It's pretty clear that even if the straight opened this second, we're still in for a world of hurt before things are back to normal. And it's equally clear that this madness is going to keep that thing closed for a good long while. I mean, if the people close to the president yo-yoing the market and profiting immensely isn't a sure sign as to how this is all going to continue to play out while there's still potentially more corrupt money to be made, then I don't know what is. It feels like every worst possible decision that can be made is being made. And it feels like no one wants to be completely honest about where we're all at right now, regardless of location or nationality, because to even cough at the truth might cause the market to finally snap back to reality.

Seriously, what am I missing here?

Since it's clearly an ongoing issue- obligatory this isn't Ai. And sorry if I can't think of a way to shorten this down to 6 syllables or fewer. This issue isn't as simple as a 1 or 2 sentence blurb.

And if I'm wrong about that too, again, please educate me here.

ETA: Wow hey thanks you guys for the actual thought out responses here. I don't work in the industry so I don't exactly have an engineer 2 doors down that I can go bother with this. And, I have no idea where else I could even ask all this.