With the US midterm elections looming and fuel prices having more than doubled since the US-Israel conflict with Iran began in February, President Donald Trump has spent the past few weeks doing what any politician facing angry voters does: announcing things.
On Friday, Trump announced a deal with President Vladimir Putin for Russian diesel to be released immediately to the US and global markets. The deal includes the immediate supply of over 300,000 tonnes, 500,000 tonnes in November, and a further million tonnes "immediately thereafter." Trump declared that diesel prices in the US and across the world "will be COMING DOWN, IN RECORD NUMBERS, AND FAST!" and that "Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority." A further 3m tonnes of Russian diesel would follow "within a short period," contingent on the condition of Russian refineries - a caveat doing some quiet heavy lifting in that sentence.
Earlier in the week, at a campaign stop, Trump announced a waiver allowing red dye diesel - off-road fuel that doesn't face federal taxes - to be used on US highways without federal levies. This is the kind of idea that sounds simple until someone explains it.
David Ruisard, pricing manager for commodities intelligence firm Argus, noted that the only difference between regular diesel and red dye diesel is the dye itself. The problem, he explained, is that the dye is "extremely hard to clean it out of your tank," which becomes a serious issue for trucking companies once the temporary tax relief ends. "The fines are pretty high for having that in your fuel tank because it's considered tax evasion." There's also the small matter that rail operators and others typically set aside a certain supply of red dye diesel, and if everyone suddenly starts consuming it, that supply depletes too.
Not every lever has flopped. Last week, following pressure from Trump, G7 countries announced they would release 100 million barrels of oil and diesel from stockpiles. Patrick De Haan, head of petroleum analysis for fuel price tracking website GasBuddy, said the announcement itself - regardless of how much has actually been released - "has worked to push prices down to some degree." Modest declines in both gasoline and diesel have been recorded recently, which De Haan attributed partly to "some of the manoeuvres that we've seen the Trump administration employ over the last couple of weeks."
Oxford Economics chief US economist Michael Pearce agreed the G7 release helped, but warned it's only temporary. "As long as energy exports from the Gulf remain disrupted, stocks will need to be drained further to supply the market," he said. "And the need to refill those stocks will mean energy prices remain elevated for a period, even when disruption in the Middle East clears."
The broader economic picture isn't helping. Global oil supplies have been restricted since the conflict effectively halted the usual flow of oil and refined products through the Strait of Hormuz for months. Crude flow is nearly back to pre-war levels, but the price remains above $100 a barrel, with knock-on effects for diesel and gasoline. Ruisard estimated that the price increase from about $3 a gallon to $6 a gallon for diesel is "60% connected to the Strait of Hormuz, 40% connected to the Russia-Ukraine conflict." Those higher energy prices are responsible for most of the uptick in inflation this year, according to Pearce, which is in turn pushing up interest rates. "The combined impact of higher rates and higher energy prices is squeezing household budgets and adding to firms' costs," he said.
Trump also said this week he was "thinking about" suspending federal tax on gasoline, and has been imploring states to cut their own gas taxes. Several have, including Ohio and Georgia. De Haan noted that state taxes form a "moderate portion" of what consumers pay at the pump, and those reductions have helped bring down national averages. But suspending the federal levy would require Congress to cooperate - "That may be difficult to obtain ahead of the midterm elections," De Haan observed, in what may be the understatement of the fuel crisis. He estimated that Indiana, which cut its gas tax in May, has lost $1bn (£760m) in state revenue as a result.
Trump has also previously supported banning US diesel exports, which Pearce said would provide partial relief in the Gulf and Midwest but "little benefit" to the Northeast and West Coast. Worse, "The policy risks backfiring because it would result in stockpiling of diesel, and as that storage runs out, refineries would need to cut back on production," he said. "That would raise prices of other energy products, including gasoline."
De Haan's assessment of the administration's efforts was blunt: Trump has "basically pulled all of the small levers that a president can pull, and we're still seeing prices very elevated." The only meaningful fix, he said, is solving one or both of the geopolitical conflicts driving the crisis - reaching a deal with Iran and facilitating an agreement between Ukraine and Russia. Both, as Pearce noted, are issues the White House cannot directly control.
Even in the best-case scenario, Ruisard said damage to Middle Eastern facilities from military strikes means production would take four to six months to return to normal. His message to consumers and industry: "Regardless of what happens and whether the president is able to successfully negotiate that kind of a deal, high prices are here to stay for a little while at least."