There Are 25 Days-Worth Of Oil Supply Left In The USA, But Don't Panic

With the flow of oil through the Strait of Hormuz down to a trickle, many countries are on the verge of running out of fuel. The United States has about 25 days of oil supply, however, it's extremely unlikely that the country will ever run out of fuel. The larger issue is that the United States can't isolate itself from the global market indefinitely. As prices soar in Europe, American producers will be tempted to export more of their oil for higher profits.

Americans are feeling the pinch at the pump with the average price of gasoline at over $4 per gallon, but the situation is far worse in Europe. According to The Detroit Free Press, the average price of gasoline per gallon in Europe has spiked from $5.93 to $10.10. Even on this side of the Atlantic Ocean, rising prices are fueling fears that oil may run out, as during the 1970s oil crisis. That won't happen, however, Patrick Anderson, head of consulting firm Anderson Economic Group, told the Freep:

"For Michigan and the auto industry, the immediate economic consequence involves higher gas prices that signal to consumers potential inflation, and the pervasive increase in diesel fuel prices that impose real and immediate costs. Both are real concerns. Running out of oil is not."

Americans use between 8 million and 9 million barrels of gasoline per day. With the country producing up to 13.9 million barrels of crude oil and exporting 4.8 million of those barrels, oil consumption would be almost at equilibrium if every drop of crude were somehow refined into gasoline. Domestic production has largely helped to temper price increases. Despite being the world's leading oil producer, that oil is often refined into other petroleum products; the U.S. still needs to import oil for gas and diesel. But America is also sitting on a wealth of gas; 413 million barrels of crude in reserves. We could export less, or tap into those reserves, should things get dicey. 

The longer that the Strait of Hormuz remains closed, the more likely that U.S. fuel prices will go up. Countries that typically receive all their oil via waterways are now seeking alternative sources of crude oil. Six scheduled tanker deliveries to Australia this month were canceled, and the country couldn't find alternatives to replace them all. Last month, Australia's energy minister stated that hundreds of stations were already out of at least one grade of gas. It's simply supply and demand. When countries are willing to pay anything to avoid running out, there will be less supply for American gas stations.