If the US produces 70-80% of its own oil, why would an oil disruption in the Strait of Hormuz affect our oil prices?

The Strait of Hormuz is a chokepoint waterway located in the Middle East between Iran to the north and Oman/UAE to the south. It has been controlled historically by Iran and its Revolutionary Guard (IRGC). The IRGC has operated in this area with the ability to disrupt maritime traffic. Approximately 20-35% of all the global oil consumption, crude and refined oil, passes through this chokepoint. With the existing Iran war, the IRGC, in retaliation, has disrupted this maritime flow driving up the price of oil.

Think about Supply and Demand, 101. If demand is high but supply is low, prices go up. With the Strait of Hormuz supplying 20-35% of global oil and this supply is no longer available or limited, and the demand for oil is still needed, customers will compete for what oil is left paying higher prices to secure their need for oil. I compare this to an auction. If an item is up for bid and it is desired by other bidders, they will bid up the price to win the item. If no one wants the item or only one of a few bidders desire the item, it will sell at a lower price.

Oil is a global commodity, sold on the market for the highest price. Oil is primarily purchased by oil marketing companies, investors, international entities. Even though the US may supply most of its own oil, instead of the oil companies selling it within the US, the oil companies will sell this oil on the global market if they can get a higher price. Now this may sound unpatriotic, but the US is a capitalistic society, and executives of oil companies have their due diligence to ensure their stakeholders maximize profit.

So, if the rest of the world is now having to pay a higher price for what oil is left in the global market, due to the disruption of oil tankers not getting through the Strait of Hormuz, and this price is higher than what the oil companies can receive in the US, then they will sell to the rest of the world vs. selling domestically. US companies that need this oil, i.e., transportation, industrial, refining, will in turn have to pay a higher global price to secure this oil and pass this increase on to their customers.

How could we stop these oil companies from selling our US oil to the global market? The only way would be for the government to step in. Our government could ban exports, force companies to sell domestically or control the price. As a capitalistic, free enterprise country, this is something the government will not do or has not done to the best of my knowledge.

Oil is a foundation input for the entire global economy affecting the entire supply chain market, i.e., manufacturing, food production, transportation. The wire market is not an exception. With oil prices rising, the price of wire will also increase. Reference blog, Steel Wire Prices 2026.