The Middle East has been at war for a month, but the world's largest oil producer, the United States, is panicking.

This article is sourced from: The Times Weekly
By: Ma Huan

The Middle East conflict has been going on for a full month, and the situation still isn’t clear.

On this front, the United States and Israel are still carrying out attacks against Iran, and there are no signs of any easing in military operations.

According to CCTV International News, in the early hours of March 28 local time, Tehran, Iran’s capital, was hit by multiple rounds of intense bombing in many areas. Observers say this U.S.-Israel strike on Tehran is the largest-scale attack in recent times. Iran University of Science and Technology, located in Tehran, was also hit by U.S.-Israeli airstrikes during the early hours of the same day.

On March 27 local time, U.S. Secretary of State Rubio said that the United States can still achieve its military-action goals against Iran without deploying ground troops. Rubio also said that he expects the military action against Iran to end at an appropriate time. In another report, the U.S. news website Axios said Rubio told the meeting of the foreign ministers of the G7 that the fighting will continue for “two to four weeks.”

                    Photo source: The White House

On the other front, in the United States, panic over oil prices is spreading. U.S. President Donald Trump is doing everything he can to drive down oil prices.

According to a report by China Central Television (CCTV), as of March 25, data from the American Automobile Association (AAA) shows the nationwide average gas price in the U.S. has reached $3.98 per gallon, up about 35% from a month earlier. Diesel prices have even surpassed $5.345 per gallon, rising more than 40% within a month. Multiple sources say that unless the U.S.-Iran negotiations can quickly make progress, panic about crude oil supply will spread into the entire United States.

But even though Trump has pushed back the deadline for strikes on Iran’s energy facilities to April 6 and has repeatedly hinted that negotiations are making progress, oil prices have not shown any clear drop.

The U.S. is the world’s largest oil producer today—so why is it also unable to escape this spike in oil prices?

The limitations of U.S. crude oil

Before the outbreak of the Middle East conflict, the Trump administration once believed that the massive scale of oil production would keep the U.S. from suffering a severe energy shock.

Earlier, according to Xinhua News Agency, after the conflict between the U.S. and Iran broke out, U.S. shale oil production companies would become the main beneficiaries, and these oil producers were expected to earn more than $60 billion in “unexpected windfall profits” this year.

But now, the U.S.—the world’s largest crude oil producer—is panicking.

U.S. Energy Information Administration data released on the 24th shows that over the past week, the average diesel price across the U.S. has risen to $5.375 per gallon, a 50.7% increase compared with a year ago. Also, according to data from the American Automobile Association, in the coming days the national average gas price in the U.S. is very likely to exceed $4 per gallon, reaching the highest level since August 2022.

With oil prices continuing to climb, cargo transportation costs have been driven up significantly, putting pressure on operations at U.S. businesses such as coffee shops and grocery stores. According to a report by CCTV Finance and Economics, Eisenhower, dean of the business school at Wayne State University, said that since the conflict in the Middle East escalated, oil and natural gas prices have surged for nearly four weeks, and the upward trend is not expected to change in the short term. The rise in oil prices will broadly affect grocery store operations, which in turn will push up food prices.

Supporters of Trump U.S. workers
Photo source: The White House

Why, even though the U.S. has such high crude oil production, it’s still hard to withstand the impact of this oil-price increase? This is related to the characteristics of the crude oil produced in the U.S.

Crude oil produced around the world is not a homogeneous product. The composition of crude oil determines how easy or difficult it is to refine.

For example, Iranian-produced crude oil has an API gravity of 33–36 degrees and a sulfur content of 1.36%–1.5%. In the petroleum industry, this is the “best” blending crude oil. This type of crude can produce a high proportion of gasoline and middle distillate oil without overly increasing processing costs.

By contrast, U.S.-produced crude oil—such as West Texas Intermediate (WTI)—has an API gravity of 39–40 degrees and sulfur content below 0.25%, so in theory this oil is of high quality. But in actual refining, its molecular weight is too light to produce the heavier middle distillate oil needed for a complex refinery to run at full capacity. Some refineries in Europe and Asia must blend it with heavy crude oil in order to refine it.

This kind of refining method undoubtedly increases costs.

Even within the United States, most refineries’ refining systems are seriously dependent on heavy crude oil. This structural mismatch causes the U.S. to export large quantities of its own light crude oil while also needing to import large volumes of heavy crude oil for refining.

So, although oil production has ranked No. 1 globally since 2018, the U.S. still can’t do without crude oil from places such as Canada and the Middle East.

In 2025, the U.S. maintained its position as the world’s largest oil producer with a record 13.6 million barrels per day of crude output and exported large volumes of light shale oil. At the same time, the U.S. still imports large amounts of heavy crude oil from countries including Canada, Mexico, and Saudi Arabia. According to data from the U.S. Energy Information Administration (EIA), in 2025 the U.S. imported 7.917 million barrels per day of crude oil and petroleum products, with Canada accounting for more than 56%, or 4.493 million barrels per day.

And as the conflict in the Middle East pushes up international oil prices, oil companies in the U.S. cannot insulate themselves; the supply of crude oil within the U.S. will inevitably tighten and prices will rise.

Rising diesel and gasoline prices will increase transportation costs and further affect prices of food, construction materials, and retail goods—adding fuel to inflation.

After the outbreak of the Middle East conflict, Trump once said, “The United States is currently the largest crude oil producing country in the world, and we can make a lot of money.” But so far, it appears that this money only lets oil companies profit, while it can’t be returned to ordinary Americans. Like people in other parts of the world, they are facing mounting pressure from higher living costs.

Unlocking Iranian oil

Under supply pressure, the U.S. government has even lifted restrictions on Iranian oil.

According to a statement from the U.S. Department of the Treasury, on March 20 local time it approved a 30-day authorization that conditionally relaxes sanctions on Iranian oil products, allowing Iran to deliver and sell them.

As for why the U.S. would loosen sanctions while carrying out attacks with artillery fire against Iran, U.S. Treasury Secretary Bessent said: “By temporarily releasing existing crude oil supplies, we will quickly ship about 140 million barrels of crude oil to global markets, expand the amount of global energy supply, and help ease the temporary supply pressure created by Iran.”

“Fundamentally, we’re using Iran’s crude oil to push back against Tehran, to lower oil prices, while continuing President Trump’s ‘epic rage’ action,” Bessent explained.

Photo source: International Energy Agency

This is the third time within two weeks that the U.S. has loosened restrictions on oil sanctions.

Previously, to ease the trend of rising oil prices, the U.S. first relaxed transaction restrictions between U.S. companies and Venezuela’s oil company, and then temporarily removed some sanctions on certain Russian oil.

But these temporary measures can’t curb the rise in international oil prices.

Economists and investors believe that unless the Trump administration can quickly broker a genuine ceasefire, or the Strait of Hormuz can somehow be reopened, the world will face a real economic recession triggered by an oil crisis.

Imported inflation generated by the global surge in crude oil prices increases pressure on everyday life for people in the U.S., and also puts Trump under enormous political pressure.

According to a report by CCTV News, a poll released on March 24 local time showed that U.S. President Donald Trump’s approval rating fell from 40% last week to 36%, the lowest level since his return to the White House.

Americans’ views of Trump’s handling of controlling living costs have significantly worsened. In the latest poll, only 25% of Americans approve of Trump’s handling of the cost-of-living issue.

“At first we thought the conflict in the Middle East would be short-lived. We expected oil prices would surge first and then fall back. The Federal Reserve might ignore this temporary risk, but since then the Strait of Hormuz has remained closed,” said Christopher Waller, a Federal Reserve governor. “This conflict looks like it will last longer, and crude oil prices will also stay elevated for a longer time. That means the U.S. inflation problem is much more serious than we initially expected.”