For the raw material, crude oil, you need to jump over to https://www.eia.gov/energyexplained/oil-and-petroleum-produc...
[1]: Fungible means that every barrel of oil is commercially equivalent. I say oil is mostly fungible because there's quite a bit of nuance in various grades of oil, but in broad strokes, you can make the same stuff from any grade of oil, it's just harder with some grades than others, which keeps price stability between the various grades - if one grade gets too expensive, the consumers of crude oil will make due with a different grade. Gold is more fungible - 14k gold is 14k gold. Dollar bills are fungible - you don't care which one the cashier gives you as change. Fine art is not at all fungible.
Our gulf coast refining capacity is built with heavy sour crude coming from Central and South America in mind, but most of our indigenously extracted oil is light sweet. It's more profitable to just trade for the crude our infrastructure is built for than to refine the wrong crude, but this does expose us to the global market prices.
[1] https://www.fsmetals.com/about-us/blog/americas-light-sweet-...
[2] https://epic.uchicago.edu/news/why-do-we-import-russian-and-...
Oilfields generally last a long time as there is little incentive to drill a lot of holes and add hundreds of millions in equipment to empty one in 5 years or less. Instead companies extract oil across decades so when a new oil filed gets tapped regional prices shift, refineries adapt, until regional prices quickly match global ones long before the well is dry.
Fracking is something of an exception, but it’s still dependent on having refineries to process the stuff.
In agriculture we call it bias, and elevators post this price on the sign trying to get farmers to sell. It is understood when you bring in a load of corn they pay you the Chicago price minus the bias and the Chicago price is well known (rural radio stations report it every half hour), while the bias can be very different between two companies in the same small town. (In reality most corn is on a contract with prices set months before, but there is always a small percent not on contract)
Likewise, oil at the well is worth less than at the refinery, and the difference is about the shipping costs (though I suspect shipping is all contracted out and so you won't find the real difference anywhere)
I'm sure gold is the same, but I have less insight into that market.
All buy prices generally will be lower than sell prices (hence spread), no matter what. Everyone needs to get enough of a percentage to make a transaction happen, after all. It’s not a charity.
Also for instance with Gold, raw gold dust or random blobs of unattributed melt will always sell at a discount compared to an authenticated coin or bar of the same purity (maybe as much as 10% or more), due to difficulty in figuring out it’s actual purity and ability to sell it on.
If someone is operating a mine/refinery, they can negotiate something better if they have a good long term track record, of course.
A easily validated coin or bar, for instance, might even be sellable same day to a retail customer, where dust or a random no name bar might require tracking down a wholesale buyer (and get a lower price) and require more time and work to validate - and have more risk for the middleman due to fraud or price slippage.
Some coins or bars will also not be in high demand at the moment, and require a larger spread to be worth it for a given buyer.
Certain high demand or standardized products will also be able to demand a premium (American eagles, or Canadian maple leafs, or whatever is in vogue now.). Sometimes as high as $75 or $100 above normal spot.
Standardized (and tracked/serialized) COMEX bars are used to set the market price, but are huge, and not something that folks can typically get value from by holding in their hand, as they need to always have a documented chain of custody or go through an expensive recertification.
So smaller amounts will also have a corresponding larger spread.
Same for all commodities. They are standardized, but that sets the baseline. Almost every actual individual product has some normal offset from it for whatever specific difference applies. That difference includes things like quality, transport/delivery costs from its current location, usability/marketability of that specific form, etc.
Fascinating eh?
For example, nat gas prices in the US are usually cheaper than the price in Europe. For the last year, due to recent events, the price differential has been a lot bigger too.
on top of that, there are contracts. So Japan might pay a different price to Europe, but that might be because they bought a contract 12 months ago for today's price
Also, if your goal is reducing gas prices, disconnecting markets by banning foreign trade isn't an answer anyway, even if we ignore light/heavy crude problem. With significantly reduced prices, oil production will fall and eventually, imports will be needed again to provide necessary amounts for the market.
America already has by far cheapest gas of the developed countries. Reducing it even further won't make anyone much benefit.
Even if the oil was also domestic, global oil prices would still have an effect on domestic oil (and thus gas) prices because that oil could get shipped overseas or stay local.
Long term pricing contracts, futures are about price stability and prediction. Predicating that there is a "better price" out there demands you not consider the long term consequences of seeking it and charging it.
Sometimes, It's better for everyone (yourself included) NOT to seek the highest spot rate price for something.
"I got $5 but I bankrupted my customer and now I can't get $1" is not in the end, a good move.
And many countries only produce a specific type of oil, which is why we import several types of raw oil even in the US and that affects our local prices.
it’s like, “let’s let another country bare the burden/suffer”
we pay for the luxury i guess
at least that’s how i understood it, could be wrong, would love to learn otherwise
(there are refineries in the United States)
If you look at the top 5 refineries[1] they're relatively near population centers in the hundreds of thousands to millions of people (ex. Baton Rouge, New Orleans, Houston), and 4 of them are a football field away from residential neighborhoods.
[1] https://en.wikipedia.org/wiki/Petroleum_refining_in_the_Unit...
The largest refinery on the west coast is within Los Angeles county.
Oil refineries are ubiquitous in the US.
The above is about a specific refinery I know of. There are more than 100 in the US with different management.