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of any purchase of $100 or more. That's promo code Brian. It's going in the opposite direction. Remember. We have a thousand year Supply of gasoline.
China doesn't. China doesn't. We have a thousand years, we have more gasoline, we have more oil.
Now when you add Venezuela to it, we really have more oil.
So that is President Trump yesterday talking about the economy in Michigan. Mike Summers with us now from the he's the CEO of the American Petroleum Institute. And Mike, if I told you 10 years ago that I'd be excited when the CEO of the American Petroleum Institute was in studio, they'd be like, Brian, what's wrong with you?
Now I am because nothing more interesting to me than energy because it matters so much.
So, and I love, if people have a point of view, that's good. I know what you're hoping for, but I just need the reality. We talked to the president two hours ago or an hour and a half ago, and he said the strait's open. They were in control of the strait. But we're not getting many ships through the strait, are we?
We are not. Even in the peak period of the memorandum of understanding, we were only getting about 8.5 million barrels of oil through the Strait of Hormuz. And we believe, our numbers suggest that it will take about 11 million barrels to get to where we were prior to this conflict. Remember, there was about 20 million barrels going through. We've been able to replace a number of those barrels through pipelines, through UAE, through Saudi Arabia.
You do that so quickly?
Well, are the pipelines there and you just decide to use them or you made them?
So they weren't at full capacity. It was cheaper, honestly, to get it through the Strait of Hormuz.
So they just have started to use the pipelines at a level that they were built to produce.
So the real issue here is: how do we maintain the capacity through those pipelines, of course? But also, we have to get the Strait of Hormuz open as quickly as possible, or we're not going to be able to see the prices that we saw prior to the conflict.
So I understand the Saudis were immediately redirected when this first happened to the Red Sea. And they got up to 8 million, 8 million barrels of oil, which is they normally produce that a day, 8 million a day. Yeah, that's about right.
So now they got 8 million through the Red Sea, so we're okay. But now the Houthis and Saudis are skirmishing.
So unfortunately, the Houthis have essentially shut down that path through the Red Sea. Just for the Saudis, for everyone. For the Strait of El Mandab.
So it's primarily for the Saudis, but it's very difficult. I mean, that's the most significant oil is coming through there. You're able to get some Chinese tankers through that have negotiated with the Houthis. Which means they're paying them? It's essentially you're only getting, you should be getting about 2.5 million barrels out of the Strait of El Mendab.
And if you can't get that through, you're going to continue to see continued high prices. I'll tell you, there is another route, though. They could go north through the Red Sea to the Suez Canal. Here's the problem with that: you can't get the very large ships through the Suez Canal because the draft is so deep that you can't get it through the Suez. The consequence of that is you essentially have to offer.
Yeah. The oil From the beginning of the strait, pump it through a pipeline, and then reload it at the other end of the strait.
So the logistics are starting to get very, very difficult. You got to get the strait open. You got to get the strait of El Mandab open, which is on the south side of the Red Sea, so that we don't have to use that other service. Other people have told me. Yeah, everything's what Mike somebody's saying is true.
But little by little, the word is never depend on the strait like this again. Isn't that? Agree. Yeah. So about two months ago, API actually put out a framework.
We called it the American Energy Security Framework. The whole idea here is there are a lot of things that we can do here in the United States to ensure that we can continue to produce here. But at the same time, we need to be focused on allies so that we don't have to depend on the Strait of Hormuz. For example, you're already starting to see this. We're already seeing new pipeline networks develop in the Middle East that a number of American companies are partner to.
So we're able to get oil to avoid the Strait of Hormuz so they're not held hostage by the hostile. Iranian regime. The other thing we really need to do is start focusing on Western hemisphere development. Of course, we have it here in the United States, but we should focus on other countries that have significant resources, like Venezuela. And every time I say things like that, they'll go, but yet they understand it's still a global price.
So even if you're producing more in the West and it's more dependable, Mexico and Canada, we're still hostage. To the Middle East. But we're not nearly as hostage as what we were 20 years ago. The United States now produces almost 14 million barrels of oil every single day. That is a completely different story than what we were dealing with in the 2010 era.
It's the fracking revolution, the innovation that has occurred here in the United States that has allowed us to deal with these international crises in a way so that you haven't seen the elevated prices that we would have seen prior to that American energy revolution. What does it do that the UAE broke out of OPEC and that Iraq's considering it?
So it's a very big deal that they did this.
So what this essentially means is that OPEC sets the quotas in that block that says how much oil they can produce. And it frustrates some of the countries. It frustrates a lot of the countries. And this has primarily been a Saudi-dominated cartel for the last 40 years.
So it's in the Saudis' interest that you keep the price artificially high. Because they are the biggest producer in the Middle East.
So, what UAE has said is that they want to be able to produce more than their current quota, which is about 2 million barrels a day.
Some people believe they could get up to as many as 5 million barrels a day, which would be a very big deal. And if you could then build a pipeline from UAE to get it to the delivery points that it needs to get to without using the Strait of Hormuz, that would allow UAE, one, to become more economically independent, but two, would provide another buffer for world oil supplies. Cheers to America's 250th birthday. Get 20% off your first purchase at FoxnewsWineshop.com with code FN Radio20. 20% discount excludes wine club offers and cannot be combined with any other promotion.
Expires July 31st, 2026. Must be 21 or older to order. Please drink responsibly. What about natural gas? Does that fall into your ostracis?
Here's the yes, it absolutely does.
So, most of the natural gas that's produced here in the United States is what they call associated gas. You get the gas from the same hole that you're drilling oil from.
So, what that means is that the gas is a byproduct for oil production. The biggest problem that we have is that we don't have enough pipelines to move the gas from where it is to where it needs to be.
So, absolutely, natural gas is a success story here. You haven't seen a significant change in the price of natural gas throughout this conflict. The reason why is because we are so abundant in natural gas in this country. The price of natural gas hasn't moved at all. While you've seen these wild swings in the price of oil.
So There are also so many other uses for oil and gas, which you guys always told me, too.
So, how are farmers dealing with this?
Well, that's the big challenge.
So, farmers really do depend on diesel fuel in particular. And you're seeing very high prices for diesel.
So, this is bad for truckers, it's bad for farmers. Farmers are also dealing with a lot of higher input costs as a consequence of this, particularly on the fertilizer side, because we're just not producing enough fertilizer here in the United States for farmers to use.
So, what does Venezuela coming online mean? Here's the President talking about Venezuela Cut 57. Venezuela's been great. They've been doing a great job. We're working with them.
Take millions and millions of barrels of oil. But they're doing well, and we're doing well. One day. You know, a lot of people were against that war. We don't want the vendors.
Well, you doing what are you doing after we wanted about 48 minutes approximately. They said, oh, that was a good move.
So what is Venezuela? We saw the rusting husk of what's a thriving oil industry, and some of the companies were reluctant to go in. What have they found? What are they doing?
So here's the bottom line. We used to import about 100,000 barrels a day of Venezuelan oil prior to the removal of Maduro. Today we're importing about 600,000 barrels. That has been a real difference maker for American consumers. Here's the other good part about that.
The oil that's produced in Venezuela is a heavier quality of crude. The refineries in the United States were actually built to refine that heavy quality crude. We actually buy it at a discount. It's cheaper than what the advertised price is. We buy it at a discount, and then we refine it in American refineries that have American workers, and then we sell it to American consumers at that same discount.
So this is a very good thing for the United States and fits well into our plan so that we're producing more crude oil here in the Western Hemisphere with allies. Have the companies let you know what the infrastructure is like there, and have they begun fixing it? Because they were worried about fixing it and then some other dictator coming in and kicking them out again.
So, most of the oil that is being produced is being produced in areas that have been produced before this conflict: Lake Orinoco, and then offshore for natural gas. The real prize in Venezuela is in what's called the Orinoco belt. The Orinoco belt is that heavier viscosity oil. It's more expensive to produce. I think you will start to see significantly more investment now that they are getting their government back in shape.
Chevron, Exxon, who's there?
Well, Chevron is the major player. They've been there for over 125 years, but you're seeing renewed interest from other companies as well. All right, so we'll see if they get in there. But the feeling with security, is that a non-issue? It's a huge concern, particularly post-the Venezuelan earthquake.
And we send our prayers to everybody that has been affected by that earthquake down there. The real issue is what's going on above ground. Are we going to have the stability of government that we're going to need? That's going to provide the security that we need to continue to invest in this heavy project. Twenty seconds, Russian refineries blowing up.
Good for the war? Is it bad for your business?
So what has essentially happened is you have about 10% of the world's refiners offline right now. The good news is that the American refiners have really stepped up to the plate. We're operating at about 96% efficiency right now, which is record highs within the last decade.
So we are helping to fill the gap. But the fact that so many refineries throughout the world, not just in Russia, but in other parts of the world, like in the Middle East, it's bad news for consumers. He's the CEO of the American Petroleum Institute. Mike Summers, thanks so much. Really appreciate it.
Great to be with you, Brian. You have a very important job. Keep it going.
