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U.S. energy output helps cushion Hormuz supply shock

API says crude and petroleum inventories are now below the five-year average for this time of year, keeping margins tight if disruptions persist.

Reported · Written up by our desk · Energy

OilPrice reports that the U.S. energy system has helped reduce the impact of oil and LNG supply disruptions from the Middle East after the Strait of Hormuz closed to traffic, prompting refiners and gas importers to search for alternative supply.

According to an analysis cited from the American Petroleum Institute, record U.S. crude production, large natural gas output, and rising LNG exports took decades to build, with companies investing billions of dollars each year to expand oil, natural gas, and fuel supply.

The outlet adds that API described the U.S. role as a stabilizer, but said it has a cost for the domestic system. U.S. crude oil and petroleum product inventories have fallen below the five-year average for this time of year, leaving narrow margins of error across production, refining, and exports.

OilPrice also notes that while the disruption tied to the Iran war has not disappeared, U.S. oil output and fuel exports have helped keep crude oil prices in check for much of the past five months, alongside ongoing expectations that the conflict could be resolved soon. API said markets remain tight and uncertainty around the Strait of Hormuz and other key shipping lanes persists.

Latest closeWTI crude $78.07 ▲3.8%|Nat gas $2.620 ▼2.5%

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