Record U.S. Energy Exports Push Global Supply, Drive Fuel Prices Higher

Record U.S. energy exports are helping offset global supply disruptions, but rising domestic fuel prices are creating pressure at home as demand surges.

(Reuters) — U.S. exporters have helped plug key global energy product shortages caused by the Iran war. But sharply rising domestic fuel costs are raising questions about the merits of sending so much overseas while pump prices climb at home.

U.S. exports of gasoline, diesel, crude oil, LNG, jet fuel and ethane all surged to record highs so far in 2026 as energy firms capitalized on the disruptions to Middle East shipments and catered to urgent orders from customers around the world.

From January to April, combined U.S. shipments of those six key energy products rose by 20% from the same months in 2025 to over 153 million metric tons, data from commodities intelligence firm Kpler shows.

The roughly 25-million-ton rise in those U.S. exports of fuels, oil and LNG from the year before has gone a long way to offset the roughly 82-million-ton drop in exports of the same products from the Middle East since the conflict started on February 28.

However, those exports have also created some supply tightness at home, especially in transportation fuel markets where both gasoline and diesel prices have jumped to multi-year highs and posed fresh worries about the cost of living.

U.S. lawmakers have taken some steps aimed at shielding consumers from further fuel and energy cost rises, including implementing waivers for fuel blending and proposing a suspension to federal gasoline taxes.

However, with important midterm elections later in 2026, further discussions over how to reduce fuel and energy costs can be expected across the U.S. political spectrum, with record export volumes likely to come under close scrutiny.

Swing Supplier

The U.S.'s raft of export-oriented refineries along the Gulf Coast have been ideally placed to tap the swell in global fuel demand seen since Iran closed the Strait of Hormuz to tanker traffic two months ago.

As fuel, oil and LNG tanker sailings from the Middle East ground to a halt, energy flows from U.S. ports have steadily climbed, with exports of several key energy products scaling all-time highs within the past month.

During January to April, U.S. exports of gasoline have jumped 27% from the same months in 2025, while diesel exports are up 23%, LNG up 26% and exports of ethane - used by petrochemical plants - are up 30%.

U.S. jet fuel exports, which are typically far smaller than shipments of gasoline and diesel, have also surged, notching up an 82% increase from the year before as refiners fulfilled panic orders from jittery international buyers.

Price Responses

Record U.S. energy product deliveries have likely helped limit the price climbs of fuels around the world, even though the trajectory remains higher across Asia due to the region's heavy reliance on the Middle East for oil supplies.

However, U.S. fuel prices have also climbed in tow, driven mainly by international crude oil prices which have rallied from around $70 a barrel in late February to around $115 this week, based on the Brent futures benchmark.

That roughly 64% increase in crude oil costs since the start of the conflict with Iran is still sending ripples throughout the global economy, and has forced fuel prices sharply higher.

Average U.S. gasoline costs have jumped from around $2.91 a gallon in February to $4.10 a gallon in April, and remain on a rising trend as the country enters what is typically the peak driving season over the summer months.

U.S. diesel costs have climbed even more sharply, from around $3.72 per gallon in February to around $5.50 a gallon last month, according to the U.S. Energy Information Administration (EIA).

Such steep price increases mean that U.S. gasoline costs are currently around 30% and diesel costs around 54% more than a year ago, despite U.S. President Trump's pledges to lower energy costs once he retook office.

U.S. consumers have also been hit by rising natural gas costs, which for residential users are up by around 14% from the year before and are holding around three-year highs so far in 2026, EIA data shows.

Sharply rising electricity demand for data centers and AI applications has been a major cause for elevated natural gas costs in the U.S. this year, which are also up sharply for LNG exporters, power producers and industry compared to a year ago.

However, record strong LNG exports have also helped prop up gas costs for several consumers, especially in areas where exporters compete for gas supplies with other users.

This tension between domestic consumers and firms that profit from exporting energy products may only get more severe as we enter the peak demand period for both transport fuels and household electricity use from air conditioning systems.

If consumers push back strongly enough, lawmakers may view moves to restrict energy exports as a means to lower consumer prices, which may become a central concern for government officials by the time the midterms roll around in November.

The opinions expressed here are those of the author, a columnist for Reuters.