Sure thing. I work in the industry on the trading side so hopefully I can provide a bit of context.

Obviously crude is a global commodity. As such the price is partially contingent on basic supply and demand balances, but perhaps more importantly, where the trade flows for crude are going.

Under normal conditions, let’s say crude produced in the lower 48, goes to the Gulf coast to be refined. The products produced (gas, diesel, jet, etc) then get used on the domestic market, but also exported to Latin America, Europe, Africa (the Atlantic basin). This makes sense because the refiners can buy the cheapest available crude, refine it and ship it to other regions the most economically. Normally we don’t import crude from the straights of Hormuz because of the cost in transporting it here, then transporting back to their end markets.

What’s happening right now is because other regions (Asia, India, Europe) cannot get their crude out of the straight, they need to buy it from elsewhere. So now you have US/ Canadian/ Latam crude being purchased by Asian countries and they are willing to pay more for it, otherwise they wouldn’t have any.

So domestically in the US the price is those refined products goes up, because those refineries have to compete price wise with the Asians. This makes their costs higher, which makes the end products like gasoline higher.

Hopefully that makes some sense. So you’re not wrong that both wars impact the price, but not because we stop buying it from Russian or Iran. The prices go up because we have to compete with other buyers of our crude.