With the midterms looming, Trump has no real way out of his gas price problem — SkimNews
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- Gas prices are stuck around $4.11/gallon on average, up more than 90% from a year ago, with the crack spread hitting a historic high above $70/barrel as U.S. refineries run at near-maximum capacity and defer maintenance to capture soaring margins.
- Trump summoned refiners to the White House earlier this week, but the companies left without public statements and the administration did not release an attendee list; Trump told reporters prices will fall but said he cannot guarantee it before the election.
- The structural bottleneck is refining capacity: Middle East refineries have shut down during the Iran conflict and Russia's diesel refineries are offline thanks to Ukrainian drone strikes, leaving North American and Chinese refiners unable to fill the gap.
- Venezuela push: the Pentagon announced a stake in North American Blue Energy Partners, which controls around 20% of Venezuela's reserves, and Chevron signed a deal to double its production there, but analyst Al Salazar of Enverus said Venezuelan heavy crude won't help because few U.S. refineries can process it and they are already at capacity.
- EPA ended its summer ethanol blending requirements early and granted biofuel waivers to dozens of refineries; Midwestern politicians and the American Petroleum Institute both warned the move would hurt corn farmers and create uncertainty for refiners, respectively.
- Even with these moves, gas prices remain about $1.50/gallon above their pre-Iran highs in many states, and analysts say the market will stay tight even if the Strait of Hormuz reopened tomorrow.
- The political math is grim: across midterm elections since 1978, the president's party loses an average of about 25 more congressional seats when gas prices spike than when they fall, and roughly half of U.S. refining capacity sits in the Gulf of Mexico's hurricane zone.
Why it matters: Trump has run out of levers before the midterms: the constraint is physical refining capacity, not crude supply, and both the Iran conflict and Ukrainian strikes on Russian refineries have knocked out the surplus that used to cushion the market. Historically, gas-price spikes cost the president's party an average of ~25 extra congressional seats in midterms — a structural drag he now cannot lift with Venezuelan deals or ethanol waivers.
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