Trump's Gas Price Fix Can't Beat the Refining Bottleneck — SkimNews
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- U.S. gasoline averaged $4.11 per gallon on Thursday, up more than 90% from a year earlier, with diesel higher and the crack spread hitting a historic $70-plus per barrel as refineries run near-maximum capacity and defer maintenance
- Trump summoned refiners to the White House earlier this week to discuss lowering pump prices; the refiners made no public statements and the administration did not publish an attendee list
- The core problem is refining capacity: Middle East refineries shut down during the Iran conflict and Russia's diesel refineries are offline from Ukrainian drone attacks, leaving North American and Chinese plants unable to fill the gap
- The Pentagon announced a stake in North American Blue Energy Partners, which controls roughly 20% of Venezuelan reserves, while Chevron said it would double its Venezuelan production under a deal signed at Caracas's Miraflores Palace with interim leader Delcy Rodriguez
- Only a small number of U.S. refineries can process Venezuelan heavy crude, and Enverus analyst Al Salazar said even with incremental Venezuelan output in six to twelve months, the real driver of the spike is the lack of refining capacity
- The EPA ended summer ethanol blending requirements early and granted biofuel waivers to refineries including Marathon and Chevron, but Midwestern politicians and biofuel groups argued the move would hurt corn farmers by cutting ethanol demand
- Trump's party loses on average 25 more congressional seats in midterms following gas price spikes than in midterms after prices fall, according to a Politico analysis of elections since 1978, and roughly half of U.S. refining capacity sits on the hurricane-exposed Gulf Coast
Why it matters: Republicans face an average 25-seat House loss in midterms preceded by gas price spikes, and Trump's Venezuela and ethanol moves won't free up the refining bottleneck before November. Even if the Strait of Hormuz reopened tomorrow, the article notes the gasoline market would remain tight.
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