Trump's tax cuts, strategic reserve releases, and other measures still fail to suppress oil prices; energy price pressure before the midterm elections ultimately depends on the Middle East situation.
BlockBeats news, October 9 — As the U.S. midterm elections on November 3 approach, soaring gasoline and diesel prices are becoming a key economic challenge for the Trump administration. Despite a series of administrative intervention measures rolled out by the White House, real-world constraints such as refining capacity, energy transportation, and global supply have limited the effectiveness of these policies.
The report noted that U.S. diesel prices once rose to a record high of $6.52 per gallon in September, while gasoline prices also climbed from about $3 per gallon at the start of the year to above $4. Trump recently allowed some dyed diesel originally restricted to agricultural and construction use to be sold on the road and delayed the collection of related federal excise taxes, theoretically saving up to about 60 cents per gallon, but this is unlikely to fundamentally increase fuel supply.
The White House has also pushed for the release of strategic petroleum reserves and is considering suspending the federal gasoline tax and restricting diesel exports. However, after previous releases, U.S. strategic petroleum reserves are expected to fall to about 244 million barrels, leaving limited room for further releases; restricting diesel exports could lead to saturation of domestic storage tanks, lower refinery utilization rates, and even further affect gasoline supply.
Chevron CEO Mike Wirth warned that restricting energy exports will tighten global supply, and the United States cannot isolate itself from the international energy market.
Argus pricing manager David Ruisard estimated that about 60% of the pressure from the sharp rise in U.S. diesel prices is related to restricted shipping through the Strait of Hormuz, while the remaining about 40% is affected by the impact of the Russia-Ukraine conflict on the refining supply chain. As Trump signaled progress in negotiations with Iran and a pre-election pause in military action, Brent crude once fell back to $102.91 per barrel, while WTI crude dropped to around $90.40.
Analysts believe that tax relief and strategic reserve releases can only temporarily ease energy price pressure. If transportation through the Strait of Hormuz remains blocked and geopolitical risks in Eastern Europe persist, it may be difficult for the Trump administration to push fuel prices down sustainably before the midterm elections.
