One Day, Two Opposite Stories About Fuel Prices

On the afternoon of October 5, the administration acted on the belief that the Iran war is what makes fuel expensive. It coordinated a 100-million-barrel release of crude and diesel from G7 reserves, pushing a substantial share of the diesel into the first 20 days, and the president signed an order deferring the 24.4-cent-a-gallon federal diesel tax — 24.4 cents off the pump price of diesel — through the end of 2026 ^[1]. Six hours later, the same president said the war was no longer why anyone was paying extra. By evening he was assigning the blame to Ukrainian strikes on Russian refineries and to refinery closures in "Blue States" like California ^[2].

What’s driving up Gasoline is no longer the Strait of Hormuz, because Record Numbers of Barrels are coming out now on an almost daily basis, but the word, ‘Refineries,’ where Russia’s are being blown up by Ukraine, and where ours are being closed up, in Blue States, like California, by the Dumocrats. — Donald Trump

His own government had spent the afternoon behaving as though the war was the emergency. The cabinet had not gotten the evening's memo. Energy Secretary Chris Wright attributed the fuel volatility to the Iran war, listing Ukrainian strikes and China's suspension of fuel exports as secondary ^[1]. Treasury Secretary Scott Bessent tied headline inflation to the war with Iran ^[3]. Both men named the war first. Their boss had dropped it from the list entirely. The premium he says is gone is still itemized in the market's own invoices. Tanker operators pay up to $40 million for round-trip shuttle runs out of the Strait of Hormuz, and sailors earn up to $25,000 in hazard pay per trip, after 93 shipping incidents and 22 seafarer deaths since February ^[4][5]. Those are costs of the blockade his own government is running, and they stay embedded in oil near $100 a barrel whether or not the strait is officially open. And the forecasts run past the messaging. Goldman Sachs expects diesel and jet-fuel crack spreads — the margin a refinery earns turning crude into finished fuel — to stay above $40 a barrel, double the normal level, through 2027 ^[6]. Aramco's chief executive warned the same week that pressure on both ends of the barrel will intensify until Hormuz fully reopens, and that rebuilding the world's fuel inventories could take two years ^[7]. The cause the president moved off the table is the one his industry is budgeting around. None of this means the evening story was invented. Ukraine's July strikes did take out roughly a quarter of Russia's refining capacity, and Russia did ban diesel exports in response ^[8]. The price drop is real, too: gasoline fell 12.5 cents to $4.30 and diesel 14.2 cents to $6.31 across 48 states in the week ending October 4, with the steepest declines in Georgia and Ohio — states that cut their own fuel taxes ^[9]. The falling numbers are the relief machinery and the state tax cuts working, not evidence the war stopped costing anything. The clock on that machinery was running by May. The president put the reason on the record himself.

The strategic national reserves, which I filled up, have been virtually drained in order to keep gasoline prices lower, just prior to the election. — Donald Trump

Since then, the Strategic Petroleum Reserve — the federal emergency stockpile of crude — has fallen to 293.4 million barrels, within sight of the 250-to-300-million operational floor below which further withdrawals get difficult ^[10]. The October release's diesel is scheduled to land by roughly October 25 — ahead of November 3 ^[1]. He has been specific about when the war ends, too.

So the only question is, it'll either be the easy way or the hard way. — Donald Trump

A week before that afternoon, he had turned down the one step that would have removed the premium at its source. On September 28, Iran offered to cease hostilities and reopen the Strait of Hormuz in exchange for negotiations; he declined, and the market billed him for it, with Brent moving toward $107 a barrel and the 10-year Treasury yield hitting 5.241 percent, a 19-year high ^[11]. In the very week the reserve was spent to offset the blockade's price, his Treasury secretary was celebrating the blockade itself.

the country would have no oil on the water this week for the first time in history — Scott Bessent

At a rally two days earlier, he had predicted what would happen to prices the moment the war ended ^[12].

And when that ends, oil prices are going to drop like a rock. — Donald Trump

The drop is now being manufactured on a schedule, without the war ending. The relief has a calendar. Diesel lands by late October, the deferral lapses at the end of 2026, and a reserve at 293 million barrels refills roughly six times slower than it drains ^[10][1]. Goldman's doubled crack spreads run through 2027 ^[6]. The relief is a schedule; the premium is a forecast — and the two do not end on the same date.