The Trump administration is pursuing additional Venezuelan crude, faster domestic energy permitting and relief from attacks on Russian refineries as a widening global fuel shortage drives up diesel and gasoline costs ahead of the November midterm elections.
By yourNEWS Media Newsroom
President Donald Trump is pursuing several avenues to increase or preserve energy supplies as disruptions across the Middle East and Russia push global fuel prices higher and bring the cost of gasoline and diesel to the forefront of the U.S. midterm election campaign.
The administration has moved to expand access to Venezuelan crude, accelerate domestic drilling approvals and pressure Ukraine to stop striking Russian oil refineries. The efforts come as attacks on energy infrastructure and restricted shipping routes have tightened supplies around the world, while U.S. diesel prices have climbed above $6 a gallon. Reuters reported that the national average surpassed that level for the first time this month.
The United States has so far avoided some of the more severe fuel shortages being experienced abroad, although American consumers and businesses are facing substantially higher energy costs.
Fuel-price increases have produced unrest in several countries. In Syria, demonstrators blocked a highway and burned tires after the government announced temporary increases of as much as 40% for some fuel products. Protests related to energy costs have also occurred in Bangladesh, the Philippines, Guatemala and Portugal.
The global situation deteriorated further after an attack attributed to Iran-backed militants damaged Saudi Arabia’s East-West oil pipeline, a major route carrying crude to the Red Sea while bypassing the Strait of Hormuz. Saudi Arabia subsequently reduced some European shipments, forcing buyers to seek alternative supplies. Reuters reported that Saudi Aramco canceled some cargoes after damage disrupted the pipeline and suspended loading at the Red Sea port of Yanbu.
Physical oil cargoes in Europe subsequently traded above $130 a barrel in some cases, while Brent and U.S. crude futures remained above $100 before retreating Thursday as fears of prolonged Saudi disruptions eased.
The disruption has added to an energy market already strained by the U.S.-Israeli war with Iran, restricted traffic through the Strait of Hormuz and Ukrainian attacks on Russian refining capacity. The White House and administration officials have characterized the sharp rise in fuel prices as temporary, expecting prices to moderate when the Iran conflict ends.
Trump, however, has also focused specifically on Ukraine’s attacks against Russian refineries as diesel supplies tighten.
“Mr. Zelenskyy has to do one thing. He has to stop knocking out diesel fuel in Russia,” Trump said during a visit to Ireland. “Let him go after targets, but not diesel fuel because he’s causing a shortage of diesel. This isn’t done by the Middle East; this is done by what’s happening with Russia and Ukraine.”
Trump’s comments followed Ukrainian attacks that reduced Russian refining output and added pressure to already tight global diesel supplies. Ukraine maintains that Russian energy facilities supporting Moscow’s war effort are legitimate targets as Russia continues attacks against Ukrainian energy infrastructure.
Diesel has become a particular concern because of its extensive use in trucking, agriculture, construction and industrial equipment. Higher diesel prices can increase transportation costs throughout the economy, raising the cost of moving food, manufactured products and other goods.
The national average exceeded $6 a gallon this month and continued rising, with Reuters reporting Thursday that it had reached approximately $6.29.
Those increases are arriving as affordability remains a major concern for voters.
A Reuters/Ipsos survey cited in reporting on the midterm political stakes found in June that 49% of respondents considered the cost of living the most important issue in deciding their congressional vote. Democratic values and norms were selected by 22%, while immigration was named by 13%.
The underlying Reuters/Ipsos data also showed that 14% of respondents overall wanted Congress to prioritize gasoline costs among everyday expenses, rising to 20% among Republican respondents.
Trump has also faced unfavorable polling on his economic management. A Fox News Power Rankings analysis placed his net approval on the economy 33 percentage points underwater, while broader polling has continued to identify inflation and the cost of living as areas of dissatisfaction.
Support for the Iran conflict has also declined. A Reuters/Ipsos poll released in August found 31% of Americans supported U.S. military action against Iran, down from 37% in March.
Against that backdrop, the administration has increasingly looked toward Venezuela as a possible additional source of heavy crude for U.S. refineries.
The White House has been easing restrictions and encouraging investment as part of an effort to increase Venezuelan production and exports. The Wall Street Journal has reported on negotiations aimed at expanding Venezuela’s oil role during the global supply crunch.
American oil companies are also moving toward new Venezuelan projects. Continental Resources signed a preliminary agreement this week with Venezuela’s state-run PDVSA involving the Ayacucho 2 block in the Orinoco Belt, while ExxonMobil has been discussing a potential return to Venezuelan oil fields.
Venezuelan crude is already entering the United States at sharply higher levels. Bloomberg energy and commodities columnist Javier Blas reported that U.S. imports from Venezuela approached 800,000 barrels per day last week, which he said was the highest level since 2017.
Heavy Venezuelan crude is particularly useful to Gulf Coast refineries designed to process that grade of oil, giving the administration another potential source as Middle Eastern supplies face disruption.
Trump is simultaneously seeking increased production at home.
The Department of the Interior has moved to shorten federal reviews and speed approvals for energy development on public lands and offshore areas. The administration maintains that faster permitting and greater domestic output can improve supply security and limit the effect of international disruptions on American consumers.
The White House has also considered additional steps to increase refining capacity. Reuters reported last week that administration officials were examining whether the Defense Production Act could be used to expand or improve U.S. refinery operations as fuel prices rise.
The United States enters the current disruption in a different energy position than it did during earlier oil shocks.
The country became a net exporter of total energy on an annual basis in 2019 and first became a net petroleum exporter on a monthly basis in September of that year, according to the U.S. Energy Information Administration. The United States nevertheless remains a net importer of crude oil, making the distinction between crude oil and total petroleum important.
A Federal Reserve Bank of Dallas analysis published in June concluded that increased domestic energy production and changes in U.S. energy trade have made the economy less vulnerable to geopolitical oil-price shocks than it was in previous decades.
That domestic production cannot prevent global oil and refined-product prices from rising, however. Oil trades in an international market, and U.S. refiners and consumers remain exposed to changes in worldwide prices even when domestic production is high.
The administration’s response is consequently taking place on several fronts: attempting to keep U.S. drilling and refining capacity high, drawing additional crude from Venezuela, pressing Ukraine over attacks affecting Russian diesel output and navigating a Middle East conflict that has disrupted some of the world’s most important oil transportation routes.
Those efforts are unfolding less than two months before the November midterm elections, with energy prices feeding directly into the broader cost-of-living concerns that polling shows are central to many voters’ decisions.
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