I recently received this question from Monte, one of our readers:
Why can’t oil companies charge more to foreign countries and less to Americans?
It sounds like common sense. We drill it here. We refine it here. Why shouldn’t the people living on top of the oil field get a hometown discount?
Regular gas averaged about $4.29 a gallon nationally on Oct. 26, according to AAA. That’s more than a dollar above where it was this time last year.
I spent 10 years on Wall Street before I started Money Talks News, and I can tell you the honest answer isn’t just greed, although there’s plenty of that. It’s math.
Here are five reasons you don’t get a discount on American gas, including a 40-year experiment that settled the question.
1. A barrel of oil has one price: the world’s
Oil isn’t like a haircut, priced by whatever the neighborhood will bear. It’s a commodity that moves around the planet on tankers. Normally, a barrel in Houston is worth about what it would fetch overseas, minus the cost of shipping it there.
The price that matters most for your gas tank isn’t the U.S. benchmark you hear about on the news, West Texas Intermediate. It’s Brent, the international benchmark.
In a 2014 study, the U.S. Energy Information Administration found Brent was the bigger driver of U.S. gasoline prices in every region it looked at — even the Midwest, home of the U.S. benchmark’s trading hub.
Gasoline itself is traded worldwide, too, and the EIA says prices at the big trading hubs move closely together. So when a war chokes off supply halfway around the world, you pay for it at the corner station, even if the oil was pumped in Texas.
That’s why crude near $100 a barrel this month, per AAA, keeps your fill-ups painful. (It’s also part of why gas prices skyrocket instantly but take forever to drop.)
2. Oil companies sell to whoever pays the most
Suppose a law forced an oil company to sell to you for a dollar less than it could get in Europe. What would the company do? Exactly what you’d do. It would ship more of its oil to Europe.
I’ve been watching corporations for 45 years, and I’ve never seen one volunteer to take less money. Oil companies answer to shareholders. Selling cheap at home when buyers abroad will pay more isn’t patriotism to them. It’s a pay cut to their stockholders.
The other half of Monte’s idea, charging foreigners more, doesn’t work either. A refinery in Europe or Asia can buy crude from many countries. Charge it a premium for American oil, and it will simply shop elsewhere.
That’s not theory. The EIA says U.S. crude exports to Europe fell 7% last year, likely because more oil from OPEC took their place. Buyers have choices, and they use them.
3. We already tried it — for 40 years
In 1975, Washington restricted exports of American crude oil. The restrictions weren’t repealed until December 2015, according to the Congressional Research Service.
For a long time, it barely mattered. From 1984 to 2011, U.S. and world crude prices stayed within $2 to $4 a barrel of each other, CRS says.
Then the shale boom flooded the middle of the country with oil that couldn’t easily get out. In September 2011, U.S. crude was selling for nearly $30 a barrel less than world crude.
That’s the hometown discount Monte is asking for. American oil, kept at home and sold cheap. So did gas get cheap?
Nope. The EIA concluded the lower U.S. crude prices didn’t bring lower U.S. gasoline prices, because gas kept following the world price.
Let’s put a number on it. The EIA’s rule of thumb is that every $1 change in the price of a barrel moves gas about 2.4 cents a gallon.
At its peak, a discount of nearly $30 a barrel worked out to roughly 70 cents a gallon — more than $10 on a 15-gallon fill-up.
You never saw that money. The cheap crude went into American refineries, but the gasoline kept selling at prices set by the world market.
Here’s a kicker: The 2015 law that lifted the restrictions still lets a president limit crude exports, but only if the Commerce Department finds shortages or U.S. prices well above global prices, along with harm to American jobs.
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4. Refineries can’t make just one fuel
Washington got a fresh lesson in this just last month. With diesel at record highs, President Donald Trump backed the idea of banning diesel exports to keep more of it at home.
His own energy secretary, Chris Wright, publicly disagreed. “The blunt tool of banning diesel exports definitely doesn’t work,” Wright said at a New York event, according to Reuters.
Here’s why: Crude oil goes into a refinery and comes out as gasoline, diesel, jet fuel and more, all at once.
If refiners can’t sell diesel overseas, Wright said, they run out of places to store it and have to cut back — which pushes gasoline and jet fuel prices up.
On Oct. 2, Trump said he wouldn’t authorize the ban, Reuters reported. Whether you like the idea or not, it shows the problem: Squeeze one fuel, and the others pop.
5. We still buy plenty of foreign oil
Here’s the part that surprises people. The U.S. pumped a record 13.6 million barrels of crude a day in 2025. Yet we still imported about 2.2 million barrels a day more crude than we exported, according to the EIA.
Why buy oil when we’re swimming in it? Because crude isn’t all the same. Much of what the shale boom produces is light crude, a thinner, more free-flowing oil, and CRS has noted that several U.S. refineries weren’t set up to handle large volumes of it.
So we trade. Canada is our biggest supplier. In 2025, it shipped us about 3.9 million barrels of crude a day, EIA data show.
Trade runs both ways, and so does payback. During the diesel debate, Interior Secretary Doug Burgum warned that a ban could bring retaliation from countries that sell fuel to us, according to Reuters.
Play games with your customers, and your suppliers can play them right back.
What you can actually do about it
So, Monte, here’s the honest answer. Oil companies can’t charge foreigners more, because those buyers have other choices. And they won’t charge us less, because they have other customers.
The real cure for high gas prices is more oil worldwide or less demand for it, and neither shows up overnight from Washington. A gas tax holiday won’t save you much, either. As I’ve written, it’s worth $2 to $3 a tank, at best.
What you do control is how much you pay for the gallons you burn:
- Shop before you fill. Prices differ from station to station and even day to day. Here’s the cheapest day to buy gas in every state.
- Buy the gas your car needs, not the gas the pump suggests. If your owner’s manual says regular, premium is money down the drain. And check out which stations give you the most for your money.
- Get paid to fill up. If you pay your card off every month, a card that pays extra cash back on gas turns every fill-up into a small rebate. You can compare cards here.
- Plan for prices to stay high. Budget your fuel as if relief is months away, not weeks. Here’s how to budget until oil prices fall.
Being mad at oil companies is free, and I’ve done my share of it. But the gallons you don’t buy, and the dimes you don’t overpay, are the only discount anybody is actually handing out.
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