Political commentator Carl Higbie discussed the recent rise in gasoline prices during a broadcast that also featured clips from President Donald Trump, California Gov. Gavin Newsom, Sen. Mark Kelly of Arizona, and Sen. Elissa Slotkin of Michigan.

Higbie addressed concerns about the sudden increase at the pump and attributed the surge largely to speculation surrounding potential disruptions to oil shipments through the Strait of Hormuz.

Higbie began by noting that drivers across the country had recently noticed prices increasing.

"You probably noticed gas prices jumped pretty substantially in the last, I don't know, week and a half," Higbie said.

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"And normal folks like us are all asking the same question, why are gas station prices rising so fast?"

He explained that many consumers question why gas stations raise prices quickly even when fuel was purchased earlier at lower costs.

"They filled their tanks at lower prices. They may have not bought an ounce of fuel since the new prices came up, thinking, hey, maybe most gas stations fill up once a week. The busiest ones on the highway, maybe three times a week. Yet they're jacking up their prices so rapidly," Higbie said.

Higbie referenced a common phrase used in the oil industry to describe price movements.

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"Well, as the industry saying goes oil prices, take the elevator up, and then they take the escalator down, nice and slow."

He noted that fuel sold at gas stations was often produced and sold on the market months earlier.

"But most of us see that the oil at the pump, or gas at the pump, was bought, brought out of the ground, and sold at market price months ago, which was around 60 bucks a barrel," Higbie said.

Higbie said the recent spike was tied largely to speculation about potential disruptions in the Strait of Hormuz, one of the world’s most important oil transit routes.

"So let me explain why you should not be freaking out right now," Higbie said.

"Okay, first, let me say I told you this wasn't going to be fuel Armageddon last week."

"Yes, there's been a surge in American oil prices too, but this is largely speculation on the disruption of the Strait of Hormuz, but I think this will probably come back down pretty quickly here, but probably not in China."

He said oil prices briefly surged before declining again.

"What happened? It spiked to 119 for like a day, and now it's back in the 80s, and it will keep going lower."

Higbie then played a clip of President Trump addressing oil markets and announcing a coordinated effort involving global petroleum reserves.

"Trump laid this out this afternoon," Higbie said before introducing the clip.

"I'm pleased to report that earlier today, the International Energy Agency agreed to coordinate the release of a record 400 million barrels of oil from various national petroleum reserves around the world, which will substantially reduce the oil prices as we end this threat to America and this threat to the world," Trump said.

Higbie explained that gasoline prices at retail stations are typically set according to replacement cost rather than the price originally paid for the fuel currently stored at the station.

"But you have to understand that gasoline at the pump is sold at the replacement price," Higbie said.

He then described the steps involved in oil production and distribution, beginning with exploration and drilling.

"So let's walk through the oil process," Higbie said.

"It's actually pretty cool. This all starts with exploration and drilling. We call this upstream, okay? Company, a whatever it is, let's drill a well for oil."

Higbie said the process of identifying and drilling wells requires geological surveys and test drilling that can take weeks or months.

"They have to identify where it is with you know, obviously they use expensive geological and seismic surveys and historical testing, and then they drill test wells," he said.

He noted that oil companies take on significant financial risk when beginning new wells.

"Actually, oil companies, they front though, the first five to $10 million of this cost, which is a huge risk, by the way, and that's per well."

Higbie said oil production in the United States generally requires prices above a certain level to remain profitable.

"And for this to be profitable in America, oil needs to be above $40 a barrel," he said.

Once oil is extracted, Higbie explained, it must be transported to refineries where it is converted into usable fuel.

"They collect it, and then they got to move it somewhere," Higbie said.

"They takes anywhere from a week to a month to do this."

He also addressed pipeline transportation and opposition to projects such as the Keystone pipeline.

"Pipeline is actually the most efficient," Higbie said.

He then discussed refining capacity in the United States.

"Did you know that in America, we have not built a major refinery since the 70s?" Higbie said.

"Yeah, most of our refining capacity is older than me."

Higbie referenced a recent announcement involving a new refinery project.

"Trump just announced the other day that a $300 billion investment into a mega refinery in Texas was going to take place."

He also mentioned refinery closures in California.

"This is also partly to replace the 32 refineries that Newsome drove out of his State of California because of his heavy regulation."

Higbie then outlined how crude oil is refined into various products.

"So as it goes there, in a barrel crude oil out of the ground is basically useless," Higbie said.

He explained that a 42-gallon barrel is refined into several products, including gasoline, diesel fuel, jet fuel, lubricants, and asphalt.

"40% of it goes to gasoline. Okay, that's what you feel put in your card," Higbie said.

"30% of it is diesel or heating oil, which is the same thing just without road taxes."

He also discussed how diesel is taxed differently.

"You're probably thinking like, why does it cost so much more money? Great question," Higbie said.

"Because politicians figured out that the industry runs on diesel and they can tax it more, and people can't avoid using it, so they just get to pay more money for it."

Higbie also noted how the recent price spike has become part of a political debate.

Gavin Newsom: "Gas prices are going up."

Mark Kelly: "Gas prices are going up fast."

"Elissa Slotkin: "Oil prices has already gone up."

Higbie said historical price trends show that oil prices have been significantly higher in the past.

"But what do I always say? I mean not to libs, I just tell them to shut up, but to sane people when in doubt, zoom out," Higbie said.

He pointed to earlier periods when oil prices rose above $100 per barrel.

"What is that thing right there, in 2008 oil hitting over $139 a barrel," Higbie said.

He also referenced oil prices during previous administrations.

"Making oil, when adjusted for inflation, $208 a barrel under Obama," Higbie said.

Higbie said oil was currently trading around $85 per barrel, well below earlier peaks.

"That's right, it's only $85 a barrel right now."

He also discussed changes in global supply, including oil shipments involving Venezuela and Iran.

"Trump has already received oil from Venezuela, and we will likely be the beneficiaries of oil production from Iran shortly," Higbie said.

Higbie said much of that oil had previously gone to China.

"90% of which we weren't getting. It was actually going to China."

He said global energy dynamics could also affect trade negotiations with China.

"If China is starving for oil, which they do need more than us, with America controlling formerly 20% of their supply," Higbie said.

Higbie concluded by describing the current situation as a temporary effect of broader geopolitical changes.

"Look, I'm not saying it's good. Okay, Americans are hurting mostly from Biden's 25% inflation during his presidency," Higbie said.

"But this is short term, and I'm asking you to just trust the man, okay, trust the system."

He added that consumers might see modest increases in fuel costs in the near term.

"Hold on for like, two to three tanks of gas for an it will be an extra 10 to 12 bucks a tank."

Higbie said the changes reflect broader shifts in global power dynamics.

"This is a really unfortunate short term reality of a complete realignment of global powers that the last five presidents, outside of Trump, literally did nothing about," Higbie said.

"So let him cook."

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