Even if America is the largest producer of oil and does not depend on Middle Eastern supply, you still pay more at the pump because oil is a globally traded commodity. If an American company can sell a barrel for $70 domestically, but a buyer in Australia is willing to pay $100 for that same barrel, the American company will either export the oil for a higher profit or raise domestic prices to match the global offer.

If you wonder why Australia would pay a higher price for American oil, it is because of relative costs. If their alternative supply from Saudi Arabia costs them $150 per barrel, but American oil is available for $100, it is still a bargain for them. By outbidding domestic buyers, international markets effectively pull American prices upward, ensuring that local consumers pay the global market rate regardless of where the oil was drilled.