Trump's "Energy Card" Faces Midterm Election Pressure as Diesel Prices Hit Record High

BlockBeats News, September 5th. According to data from the American Automobile Association, the average retail price of diesel in the United States exceeded $5.85 per gallon for the first time on Friday, hitting a new high for 2022. The price of gasoline also rose to $4.15 per gallon. The continuous surge in fuel prices is posing an increasing challenge to the Trump administration's previous political commitment to "lower energy prices and reduce the cost of living."

The rise in diesel prices is quickly transmitting to the real economy. The U.S. Department of Agriculture expects that by 2026, farmers' fuel costs will increase by nearly 30%; food and logistics companies have also begun to face higher transportation costs. At the same time, U.S. diesel inventories have dropped to historic lows, and in the four weeks leading up to August 28th, the U.S. average daily diesel export volume reached 1.77 million barrels, an increase of about 31% year-on-year, further exacerbating domestic supply pressures.

The supply side is also struggling to improve in the short term. Approximately 5 million barrels per day of global refining capacity is currently offline, with factors such as the blockage of the Strait of Hormuz, damage to Middle Eastern refineries, and attacks on Russian refineries continuing to reduce global refined oil supplies. Going into October, the United States will also face seasonal demand and supply pressures from the fall harvest, winter heating, and refinery maintenance.

Faced with rising fuel prices, the Trump administration has convened refinery executives this week, urging the industry to increase capacity and considering the construction of new refineries. However, building new refineries is unlikely to address short-term supply shortfalls, and more direct policy options such as restricting diesel exports are controversial.

With less than two months until the U.S. midterm elections, diesel prices have risen by 56% since the outbreak of the U.S.-Iran conflict, becoming a political risk that the Trump administration cannot avoid. If fuel prices continue to rise, Trump's previously touted policy of "lowering energy costs" may instead become a source of political pressure leading up to the midterm elections.