The US Now Ships Oil to Australia as the Strait of Hormuz Crisis Escalates

"The Strait of Hormuz crisis is reshaping global oil flows in ways that would have seemed unusual just months ago. One of the clearest examples is that the US is now shipping crude to Australia, a market that typically relies far more heavily on Asia and the Middle East for supply."

"WTI has spiked from the mid-$60s in late February to $114.58 on April 7, 2026, hovering near $95 as of May 8 as markets price in supply risk tied to the Strait of Hormuz. US refineries are also already operating near practical capacity limits. Pulling barrels off international markets would not suddenly create more gasoline domestically because refining infrastructure, not just crude availability, remains the bottleneck."

"The Trump administration, under pressure over gas prices at the pump, has refused to choke off fuel exports, saying it wants "the free market to behave as the free market does". The hosts walked through the logic: "the price of oil is set globally" via benchmarks like Brent, so withholding US barrels "might cause prices to rise elsewhere," which would feed into US gasoline prices."

"They described "oil markets operating very efficiently" with US supply plugging the Hormuz gap, and noted the only durable fix: "you got to open the Strait in order for everything to equalize.""

The Strait of Hormuz crisis is changing global oil trade routes, including US crude shipments to Australia, which normally depends more on Asia and the Middle East. Australia continues to rely heavily on imported fuel and crude, while the US has export flexibility that can help cover supply gaps across the Asia-Pacific. Oil prices have risen sharply, with WTI moving from the mid-$60s to above $110 before hovering near $95 as markets price in Hormuz-related supply risk. US refineries are near practical capacity limits, so removing barrels from international markets would not automatically increase domestic gasoline because refining capacity is the bottleneck. The administration has allowed fuel exports to continue, arguing that global oil pricing means restricting supply could raise prices elsewhere and worsen US gasoline costs.

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