Former US President Donald Trump asserted on Truth Social that refinery bottlenecks—rather than shipping disruptions in the Strait of Hormuz—are the primary cause of rising US gasoline prices. His statements come as retail regular gasoline hit $4.37 a gallon on Monday, up from $3.13 a year prior, according to data from AAA.
Trump Points to Refineries Over Hormuz Shipping
In his post, Trump argued that Middle East crude flows remain elevated, shifting the blame to lost refining capacity in California and drone attacks on Russian facilities. Data from Kpler shows Middle East crude exports averaged 18.5 million barrels a day in the week leading to October 1, surpassing pre-war levels. However, maritime security risks remain active, with the UK Maritime Trade Operations agency (UKMTO) recording its 10th incident notice since October 1 after a projectile hit a tanker's engine room on Monday.
According to TradingView data, US crude traded near $66 a barrel on February 27 before US and Israeli strikes on Iran, ending Monday near $91.57. Meanwhile, global benchmark Brent rose from approximately $67 to $104, while wholesale gasoline surged from $2.30 to $3.20 a gallon.
Global Supply Pressures and G7 Action
The refining sector faces localized and international supply constraints:
- Russian Diesel Output: Ukrainian drone strikes reduced Russian diesel production by nearly 30%, leading Moscow to ban producer diesel exports through October 31, according to the International Energy Agency (IEA).
- US Diesel Costs: US diesel prices reached $6.32 a gallon, exceeding gasoline by nearly $2, as analysts warn potential export restrictions could escalate pump prices further.
- California Closures: Two closed refineries in California accounted for 284,000 barrels a day, representing under 2% of total US refining capacity, per Energy Information Administration (EIA) metrics.
- Emergency Release: The Group of Seven (G7) agreed on Monday to release 100 million barrels of emergency oil ahead of the US midterm elections on November 3.
This policy coordination comes as market participants assess how emergency inventory distribution could alter energy availability and macroeconomic trends over the coming weeks.
Why It Matters
Trump's pivot toward domestic and international refining constraints highlights how geopolitical tensions have shifted energy market risks downstream from crude extraction to processing capacity. While crude shipments through the Strait of Hormuz remain high in volume, persistent security attacks and degraded refining output keep fuel prices elevated. For consumers and policymakers ahead of the November 3 midterm elections, supply chain friction at the refinery level presents a structural challenge that immediate crude releases may only temporarily alleviate.
