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joining us from new york this morning, antoine hope, he's a senior research scholar at columbia university's center on global energy policy. here to talk about oil prices. while we're experiencing these tensions with iran. so, mr. hope, let's begin with the history of the united states getting its oil from the middle east. tell us about that. >> right. well, the volumes that are imported from the middle east have decreased dramatically in the last few years with the increase in election. but, in fact, the middle east has never accounted for very dramatic share of u.s. imports. there was a time when there were significant imports from saudi arabia, from kuwait. the reason why the u.s. has been playing the key role in keeping the shipping lanes safe in the

gulf is not all about imports into its own country, it's about the stability of the market as a whole. >> what is -- how is the market handling u.s. and iran tensions? >> it's been quite remarkable. there hasn't been much of a reaction. there was a knee-jerk reaction right after the assassination of soleimani and there was another spike after the retaliation, the strikes by iran into iraqi air base that housed u.s. troops. but the knee-jerk reaction was very short lived. the market calmed down and ended up even lower than it had started. this is the second time we see this happen. back in september of last year, the saudis, processing facility, was targeted presumably by iran. this is the larger such facility in the world. it was a major disruption. very shortly major hit to saudi supplies. half of saudi -- and the market

took it in stride. the second time it happened. seismic events in the middle east, things that in the past would have caused prices to jump and created a bit of a shock, today not much of a reaction. >> and you said u.s. is concerned about the stability of the oil market and that is why u.s. gets involved when keeping the shipping lanes open out of the middle east. >> has been historically, yes. >> historically. >> yes, historically, that's been the case. now what we're hearing from washington are very different sound bites, we shouldn't be there, maybe we don't need to worry about the gulf oil, we don't need it in the u.s. and i think the saudis and other producers in the region are getting concerned that the u.s. doesn't have their back in the event of another confrontation. >> let's show our viewers when you're talking about the shipping lanes, the strait of

horm hormuz. >> right. >> and where saudi arabia and iran and qatar and uae and oman, look where they're all located as they try to export their oil supply. according to fox business, an average of 21 million barrels or 21% of global supply pass through the straits -- strait, each day. talk about that area. >> right. no, this is a major chokepoint. this is a major pathway for world energy supply and you just talked about the oil. there's also gas that goes through the strait of hormuz and energy from qatar. so it's a very significant source of energy for the world. it's still not -- it's still meaningful for the u.s. but it's very significant for asian markets, asian -- asia, south -- northeast asia is the backyard of producers and the region really gets much of its energy supply from the gulf. so for china, for japan, for korea, other countries in the region, the strait of hormuz and

the gulf in general are really vital areas. it makes it all the more -- all the more remarkable that the markets were so quiet. i think there's clearly a great deal of complacency on the part of the market. on two counts. i think there's an expectation that we've seen most of the escalati escalation, that the competition is now de-escalating so there's a sense of comfort. there's a sense of the rise of shale production in the u.s. has really enabled the u.s. market to absorb any disruption outside of the country. >> where are these -- >> both expectations probably won't. >> and where are -- you mention these countries that are getting their oil and gas from the middle east. which countries are they getting it from? >> so they -- the number-one exporter is, of course, saudi arabia. then you have exports from kuwait, exports from the uae,

going almost entirely to northeast asia, japan, particularly. iran, of course, a fairly large producer -- large exporter -- until it was hit by sanctioned. it was hit by sanctions twice under the obama administration, the negotiation, agreement of the jcpoa. again be i the truy the trump administration, november two years ago. the escalation in may when washington removed the sanctions waivers that allowed some countries keep importing at lower levels than in the past, still at significant levels. since may, exports by iran have been a trickle compared to what they used to be. >> by comparison, you said saudi arabia is the largest producer. you're talking about 12 million barrels a day according to "forbes" versus 4.7 million for iran. 4.6 for iraq. uae around 4 million. kuwait, 3 million. qatar, almost 2 million. >> correct.

yeah. except that iran is now at 2.4 million, 2.3 million production and probably be less than half a million barrels of exports. >> because of what? because of the sanctions? >> right. >> so -- >> right. >> -- how does the united states' oil and gas production factor into all of this? where are we exporting to? >> so, u.s. production has experienced the most dramatic increase ever seen in the history of the oil industry from a single country in a short amount of time. and the u.s. today is the number-one producer in the world of oil, of gas. a lot of that production stays at home and is refined in domestic refineries. so essentially pushed back imports that used to come into the u.s. are now heading to other markets. but increasingly, we've seen exports from the u.s. as well.

banking now in the millions of barrels a day. in the last few months we saw the u.s. -- net exporters for the first time in many, many years. >> net zero? >> yeah. positive exports. more exports than imports. >> okay. and do we have -- how dependent are we on foreign oil and gas? >> so we remain dependent because not all of the oil we produce domestically is really well-suited for u.s. refining capacity. u.s. refiners are really geared to process heavier grades than what we produce in the shale basins. so really to optimize the refining system, refiners to have to -- the oil industry, in general, has to export u.s. production and import other barrels of a different quality. that makes the u.s. very much tied to global markets, maybe independent on paper in the sense it's becoming net posit e positive, net exporter, but, in

fact, it's very much connected to the global market. the other way in which the u.s. is connected to the global market is prices. prices are set at the international -- at the global level. so what u.s. consumers pay at the pump for the gasoline really doesn't depend on the rise in u.s. production. it's really set by the market in general as a whole. >> so which countries -- >> the u.s. is very much exposed to -- yeah, i mean, the u.s. is very much exposed to the risk of price shocks. >> which countries are u.s. dependent on for oil and gas? >> well, there's a -- most of the imports really come from canada. so canada is a, of course, very close by exporter. it's an exporter of heavy oil which u.s. refineries love because they have the deep capacity to extract a lot of value out of their barrels. heavy oil is typically cheaper in the market than light oil, but u.s. refineries have developed very sophisticated capacities that allows them to

take those barrels and turn them into very high-value products and gasoline and diesel and jet fuel. so that's where a lot of the imports are coming from t. then you have imports from south america, mexico. we used to take a lot of oil from venezuela. that production has dwindled. venezuela, of course, is also under sanctions. then you somhave some imports f the rest of the world, west africa. those barrels have largely been displaced by domestic production. >> all right. let's get our viewers involved in this conversation. if you have questions, comments about oil and gas production in the united states, around the world, antoine halff here to take those questions. democrats 202-748-8000. republicans 202-748-80001. independents, 202-748-8002. brian, independent caller. >> caller: thanks. served a lot of time over in the gulf an on the other side of

yemen. engagements now, you could not keep the straits open but turn it on its heads and block any oil from coming out of there. i also notice you keep bringing on this kirk leopold, former commander of the "u.s.s. cole." i served with admiral nyquist over there. i find it offensive we bring on that commander when he refueled and -- he news that was the most hostile port on this earth. so thank you very much. >> okay, antoine halff, take his comments object bahrain. >> bell, you knwell, you know,o that needs to be clarified, the risk is not about the closing of the strait of hormuz. the risk is of the potential hypothetical iranian strike on facilities in the region. and we've seen iran demonstrate this capacity to hit facilities in the region. the strike in december in saudi arabia is something nobody thought was possible.

iran demonstrated it was able to pierce saudi air defenses and also to strike very tragically, very precisely, the facility. the strike was not devastating to the saudi capacity because it was pretty superficial that repairs would be don't very quickly. saudi was able to restore capacity very, very rapidly and to minimize -- reshuffle, use of its own barrels. the capacity of iran to really strike at heart of the industry in the region has been demonstrated and i think that's a bigger concern than the closure of the strait of hormuz which would not benefit iran. it needs the strait, itself, to export barrels. >> mary ellen, sarasota, florida. democratic caller. >> caller: hi. i have a question. i do appreciate that president trump is making our country energy self-sufficient. but i do wuonder why we haven't

built and expanded refineries in decades in the united states. we really need to have more refineries so we can process what we have and then also what percentage of oil and gas does europe and asia rely upon the middle east for? >> okay. >> it seems to me they're the ones that need the energy from the middle east. not the united states. >> all right, mary ellen. we'll take those questions. >> right. you want me to answer that? >> yes, please. >> i think it's true that the u.s. election has kept increasing under president trump. i'm not sure any president deserves the credit for that. that's an increase that started years ago. strult of inve it's driven by economy incentives and private industry more than by the political leadership.

of course, this increase in production has been leveraged politically by the president but the increase, itself, is really driven by industrial economic processors more than political processors. in terms of the refining capacity, the u.s. has a lot of refining capacity. in fact, the u.s. is a major -- the largest exporter of refined products in the world. it has much more refining capacity it needs to process and meet its own domestic needs and investments in refineries are very expensive. there's been a lot of investments in refining. capacity recently to meet the new standards of the international maritime organization which has set new benchmarks, new requirements for emissions from ships to the u.s. refining industry is very well-positioned internationally to compete against refineries in other regions, but there's really not much room for additional investments that increase crude processing capacity in the world. the economics not make sense so much. >> we'll go to benjamin, westville, new jersey. democratic caller. >> caller: oh, good morning.

thank you for taking my call. >> good morning. >> caller: yeah, i think -- i think that here in america, i think too many of our citizens have lost track of what's really behind this iranian issue. and i think -- i think it's less the issue of conduct of iran than it is more so our conduct in the last few years. remember, go back to the years when british pet tole yum controlled the oil fields in iran. and, you know, they were taking the oil and iran received very little revenue from it and iran pleaded, hey, we need more from our own oil. they had an election. they elected mosadek. okay. british petroleum didn't like that. appealed to mr. truman to come in and help them get rid of mosadek. truman said no. eisenhower was elected and brought onboard the island

brothers and got to read the history. it's amazing how imperialistic they were. but anyway, the bottom line is they got rid of mosadek and it's been an ongoing battle. so when the shaw was put in place, they armed him with everything he needed to keep the people under control. and some of it was brutal. and remember the -- there was the group under rockefeller and so on. what they did, they wanted to bring the shaw to america. that started the strife with the hostage issue and reagan -- reagan, he got involved in that. he, as a matter of fact, under reagan, under -- president reagan ended up doing what iran just did. they shot down an iranian

airliner using a system that had not been thoroughly developed. so here we are. but where we are with this whole issue, here's what my republican friends that don't realize, okay, that that party, the republican party, has been more so behind the collapse of this country because if you look -- you start with reagan, look at all the deficits that were built up, all the money -- the military. then you jump from there to 2008, our nation was on its knees. four presidents were involved in that particular period. one was a democrat. he balanced the budget. where did all the deficits come from? so here we are. this -- iran has been the trigger. it has been the issue behind a slow creeping collapse of the economy here in america. >> okay. antoine halff, do you have any thoughts on that?

>> yeah, i'm not sure about the creeping collapse. i'm not sure there's a collapse, but i think what's very interesting, your remarks, sure, you bring the historical per sperktive which typically is not front of mind in the u.s. but very much front of mind in iran. very much a sense of historical continuity and historical grievances. the ousting of mosadek in 1953 by the cia and the uk secret service is very much something that's remembered and a source of continued grievance in iran and it's very important to keep that in mind. in the last two days, i think the government in iran has tried to leverage the mentmory of thi event and tried to equate somehow the assassination of soleimani with the ouster of mosadek in an effort to build up public support for the government. i don't think that's been sufficient and we've seen the last couple days massive demonstrations, massive unrest,

against the regime despite its efforts to strike support -- to stroke public support for itself. >> okay. michael, gambrills, maryland. republican. >> caller: yes, hi, thank you for having me. >> go ahead. >> caller: yeah, i think that there's a bigger underlying problem here, you know, i mean, the problem with iran didn't just start, you know? it was like the caller previous to me had stated, it started a long time ago. 1979. the overthrow of the shaw. but i think right now israel is really pushing america's buttons to start a war with iran and also pushed the buttons in america to get us started with fighting against israel and nobody's talking about this. i mean, it's like a gorilla in the room and our one ally in the middle east has been, you know, kind of forcing our foreign policy in the middle east to overthrow regimes and, you know, fight with all these countries in the middle east and, you

know, we could be friends with iran. we could get their oil. you know, we could control it just like we control saudi arabia's oil. you know, and there doesn't need to be this. >> okay, but, antoine halff, do we need iran's oil? >> well, we don't need to import it ourselves, but the market can use some of the iranian barrels and, you know, i think everybody would benefit if iran was economically secure in democratic regime. as far as israeli enticement on the u.s., i think israel actually probably is a greater risk today post-soleimani assassination than it was before. the risk of retaliation is very significant and iran has in hezbollah in lebanon a proxy force with which it can threaten israel. >> trent --

>> we're not done with the process of retaliation. although iran said recently it wouldn't strike any more u.s. facilities in iraq, the potential for continued retaliation is very significant in the future. nobody knows what the retaliation will target, but it's very much there. >> we'll go to trent in gadson, alabama. republican. >> caller: good morning. >> good morning. >> caller: hey, i just had a concern. a concern. i was looking here at c-span today, oil prices and things like that. natural oil, we got synthetics, i was wondering what happens, you know, in the environment with the synthetics, you know, over natural oil? is it anything that goes on? you know, the epa, with the environment. you know, some of the things that might happen with synthetics, you know, compare it to burning natural oil, you know, and the iran prices and things like that and, you know, and what's used in coal.

i think my dad liked to burn synthetics in toyotas now and talking about they had been shipping oil to asia. i'm saying if they're shipping oil to asia, why are they burning synthetics in toyota and things like that? >> all right, trent. antoine halff? >> yeah, there's been a lot of research in alternative fuels, particularly for cars. and synthetic oil was popular at a time. i think nowadays that's not where most research efforts are directed. there's much more research and much more development in electric vehicles maybe lng, hydrog hydrogen, but synthetic oil has taken a back seat with the surge of election in the u.s. synthetics were really attractive when we thought we were running out of pioil. there's more oil than we can burn. there's more interest in renewables, low-carbon fuels. hydrogen, lng perhaps for truck

transportation for shipping, are the research in alternative fields today. >> all right. we'll go to josh in iowa. independent caller. good morning to you, josh. >> caller: good morning, greta. >> good morning. >> caller: hey, sir, i have a question about the production of oil in north dakota. what effect does the slight disruption that happened with the iran, you know, thing we have going on with iran right now, what effect does that have on the north dakota production, and what would have to happen in the world markets for more wells to be built, started to be built again, in the north dakota fields? and i have a second question as well. >> any -- >> go ahead, mr. halff. answer his first. >> okay. any kind of price increase is good news for u.s. producers and

there's been since the -- in the immediate aftermath of the attacks, both the soleimani assassination and then the retaliation by iran, there's been a little bit of hedging. you know, producers have taken advantage of the price increase in lock in some profits, future profits, in the market by buying into the futures market. that being said, north dakota is not where most of the shale production goes that's taking place. the most political base, the one that's grown -- really very rapidly has been the permean basin in texas and noix knoew m. if you're looking at the very short term in north dakota, we're getting into the winter, that's typically a time when north dakota production goes down seasonally because of the very harsh weather conditions which are affecting operations in the field. >> and your second question, josh? >> caller: it's just pretty easy, at what price does -- at what price per barrel of oil

does the american production, and i'm most concerned with north dakota, at what price does the american production really ramp up? i think we're around $60 a barrel now. at what price -- >> it really depends. there's a wide range. it depends on the individual producers and for some producers, it might be $60. for some, $70. for many producers, increasingly a growing number of producers now lower, $40, $50, maybe $30 in some cases. generally speaking, there's been a shift or kind of a gear change in the u.s. industry in north dakota as well as other markets. and until recently, the industry was really trying to increase production at any cost. even if it had to be in the red. production growth was really the name of the game. and over the last year and a half or so, wall street investors, the industry, have really changed the expectations and are really demanding that producers demonstrate

profitability, demonstrate flow and not increase production at any cost but increase their earnings, their profits. so i think that's setting the stage for a slower pace of production growth in the u.s. we're seeing a sort of shift in the nature of the industry. the cast of participants is changing as well. the small private owners that were driving most of the production at the beginning are being pushed out of the market. increasingly, it's large independents and majors like exxon, shell, are increasing their footprint, but much more conservative their approach at least in some cases so we're -- i think even if we see a price increase, we're likely to see a slower reaction from the shale industry than we've seen in the past in the case of previous price increases and the lag, the amount of time that it would take from a price hike to translate into production increase is going to be quite significant. it's not going to be instant.

it's not going be something that market can rely on in the event of a supply disruption. if saudi production goes down, we can't count on u.s. production in north dakota or texas or new mexico to immediately ramp up production to make up for that supply loss. >> we'll go to mike. crystal city. democratic caller. >> caller: hi, i'm wondering -- i heard you say i guess china and japan and all those countries are dependent on the saudi oil and oil coming out of the persian gulf. now, why aren't they down there protecting the straits and why do we have american soldiers in saudi arabia protecting their oil? >> i think that's a question they're probably asking themselves as well. they're interested in raising their military profile, security profile, in the persian gulf and there's a sense of discomfort in the idea that the u.s. might not

be as active, as reliable, in terms of maintaining security in the gulf than it was in the past. suddenly some of statements that president trump has made have been a source of unease and we've seen some of the importers in east asia increasingly raise their profile in the gulf. increase their military presence. they're not making up for any drop in the u.s., but the question you're asking so many questions they're asking themselves as well. >> antoine halff is the senior research scholar with columbia university. you can follow their work if you go to energypolicy.columbia.edu. thank you, sir, for your time. >> thank you very much for having me. and our live coverage resuming here on c-span3 in washington. at a transportation and infrastructure forum.