U.S. Refined Oil Exports Up 20%... Pressure Mounts on Trump

U.S. Energy Companies Reap Benefits...

"K-Shaped Income Gap" Deepens

International Oil Prices Plunge 7% on Hopes for U.S.-Iran Agreement

Due to the Iran war, U.S. energy dependence has increased, leading American refined oil exports to reach an all-time high. While U.S. energy companies are enjoying substantial profits from exports, consumers are left struggling with higher gasoline prices. There is also speculation that the U.S. government may soon block energy exports and redirect supplies for domestic use.

According to the U.S. Energy Information Administration (EIA) on May 6 (local time), American exports of refined products such as gasoline, diesel, and jet fuel exceeded 8.2 million barrels per day last week. This figure represents a rise of more than 20% compared to the same period last year.

On the 4th (local time), a vehicle was passing by a gas station in Los Angeles, California. Photo by Getty Images Yonhap News Agency

This surge is a direct result of increased purchases of U.S. energy following the Iran war. The Financial Times (FT) predicted that if oil prices remain high, U.S. energy companies could generate an additional $60 billion in cash flow this year.

Meanwhile, U.S. President Donald Trump faces mounting concerns. According to the American Automobile Association (AAA), the national average gasoline price in the U.S. on this day was $4.536 per gallon, marking the highest level in roughly four years. Gasoline prices are closely tied to inflation. With the midterm elections approaching in November, growing public dissatisfaction over inflation could deal a political blow to President Trump. On this day, the Federal Reserve Bank of New York released a report stating that the surging gasoline prices are exacerbating the “K-shaped income gap” across the U.S. economy.

Rising energy prices are prompting a decrease in consumption, which is the driving force of the U.S. economy. Surveys show that at the end of March, as the average price of gasoline surpassed $4 per gallon, low-income Americans began reducing their gasoline purchases. Households with annual incomes below $40,000 saw their nominal spending on gasoline rise by 12%, but their actual gasoline consumption fell by 7%. By contrast, high-income households earning more than $125,000 annually barely reduced their gasoline consumption, resulting in a 19% increase in spending. Bloomberg pointed out that a phenomenon of "demand destruction," where low-income families sharply cut back on consumption, could emerge going forward.

The White House has not yet taken steps to ban fuel exports. However, energy analysts predict that political pressure within the United States could intensify. Robert Yawger, commodity specialist at Mizuho Securities, suggested that if gasoline prices reach $5 per gallon, export bans may become necessary.

Meanwhile, international oil prices (Brent and West Texas Intermediate) plunged by more than 7% on this day amid optimism that the U.S. and Iran are close to reaching a peace agreement. Hopes for an end to the U.S.-Iran war were factored in. David Morrison, senior market analyst at Trade Nation, said, "Investors are reflecting a 'peace premium,' which has triggered increased risk appetite," adding, "However, even if the strait reopens, it could take several months for shipping and trade flows to return to normal." He continued, "While global oil inventories are not critically low, regional imbalances in distribution and declining buffer stocks are increasing concerns about supply shortages in certain areas."

This content was produced with the assistance of AI translation services.