(Oil & Gas 360) By Greg Barnett, MBA – The latest Monthly Energy Review, released May 26, 2026, does not introduce a new story. It confirms an existing one. The U.S. energy system remains balanced, production remains elevated, and consumption remains flat.
On the surface, the system looks calm. That appearance has not changed since the first interpretation of this dataset earlier in May. What has changed is the clarity with which that stability can now be understood.
Looking across three consecutive MER cycles—May 2024, May 2025, and the current May 2026 release—the pattern is consistent and difficult to misinterpret. Production continues to grow. Consumption does not. The gap between the two is no longer temporary. It is structural.
In 2024, U.S. primary energy production reached approximately 103 quadrillion Btu, while consumption totaled roughly 94 quadrillion Btu. The difference did not disappear the following year. In 2025, production rose again to roughly 107 quadrillion Btu on the back of record output in natural gas, crude oil, and natural gas liquids. Consumption, however, continued to move only marginally. The latest 2026 release reinforces that same relationship. The United States produces more energy than it consumes, and it is doing so consistently.
That imbalance does not result in oversupply domestically because the system has found a way to clear itself. Over the last decade, the United States has shifted from a net energy importer to a sustained net exporter. In 2024 alone, energy exports reached more than 30 quadrillion Btu, exceeding imports by roughly 9 quadrillion Btu—a record surplus. That trend continued through 2025 and into the current data. Exports are no longer opportunistic. They are essential.
Nowhere is this more visible than in natural gas. U.S. production reached record levels in 2025, averaging roughly 118.5 billion cubic feet per day. At the same time, the United States has become the leading global exporter of liquefied natural gas, with LNG volumes alone running in the range of 12 to 14 billion cubic feet per day and growing. When pipeline exports are included, a significant share—roughly one-quarter—of total U.S. production is now being sent into global markets.
This is the defining structural shift in the MER data. The U.S. energy system no longer clears internally. It clears externally. Prices, particularly for natural gas, are no longer determined solely by domestic supply and demand. They are influenced by global marginal buyers.
The implications of that shift are not always intuitive. On paper, the United States is long natural gas. Production is high, reserves are ample, and infrastructure continues to expand. Under a purely domestic framework, that abundance would be expected to suppress downstream costs. Yet that is not what is happening.
Fertilizer prices have moved higher again in 2026, and the disconnect is instructive. Nitrogen fertilizers such as ammonia and urea are fundamentally derived from natural gas. In a system where gas is abundant, fertilizer costs should, in theory, be contained. Instead, they are being driven by forces well outside the United States.
Global supply constraints have tightened fertilizer markets. Export restrictions from key producers, particularly China, have limited availability. Sanctions affecting Russia and Belarus continue to reshape trade flows. At the same time, geopolitical disruptions—most notably in the Middle East—have constrained shipping through critical routes, including the Strait of Hormuz, a major corridor for both energy and fertilizer products. These disruptions have reduced effective supply and raised costs globally, even as domestic input conditions remain favorable.
The result is a pricing disconnect. Natural gas may be abundant in the United States, but fertilizer is priced at the global margin. That margin is currently being set by constrained supply, elevated costs in other regions, and trade frictions that have little to do with U.S. production levels. The system is long energy but not insulated from global pricing.
This dynamic is now colliding with policy expectations. The President’s recent directive to the Department of Agriculture to address rising fertilizer prices treats the issue as a domestic cost problem—one that can be corrected through internal policy action. The MER suggests something different. It shows a system that is operating as designed, but within a global market structure that limits domestic control over downstream pricing.
That tension is unlikely to resolve easily. The United States can influence production, encourage capacity, and adjust trade mechanisms at the margin. It cannot directly control global fertilizer supply, foreign export policies, or geopolitical disruptions that shape pricing. The system’s strength—its ability to produce surplus energy—does not automatically translate into price stability for globally traded derivatives of that energy.
Across the three-year span of MER data, nothing has broken. Demand has not surged. Supply has not contracted. Coal continues its structural decline, while natural gas, liquids, and renewables continue to expand. Exports continue to absorb the difference. The system is stable because it is functioning exactly as it was rebuilt to function over the past decade.
What has become clearer, however, is that this stability comes with a tradeoff. The United States has achieved internal balance by integrating into global markets. That integration brings efficiency and scale, but it also imports volatility from outside the system.
The lesson from the latest MER is not that conditions are changing. It is that they are not. The system remains long, export-dependent, and globally priced. Domestic abundance does not guarantee domestic pricing outcomes, and no amount of internal adjustment fully insulates the system from external realities.
In simple terms, the U.S. energy system is stable at home—but it is no longer priced at home.
By oilandgas360.com contributor Greg Barnett, MBA.
The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Oil & Gas 360. Please consult with a professional before making any decisions based on the information provided here. Please conduct your own research before making any investment decisions.
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