Donald Trump eased U.S. sanctions on Russia this month so Vladimir Putin could flood the world with cheap diesel. As of Friday, not a single shipment of that diesel had been identified on the global market, while Brent crude blew past $109 a barrel and gas hit $4.32 a gallon. Putin got the relief. You got the bill.
The Numbers Are Ugly
Oil jumped sharply Friday, according to NBC News, with Brent crude climbing above $109 per barrel, its highest level since mid-September and just cents shy of a five-month high. U.S. crude hit $100 a barrel, the first time West Texas Intermediate has crossed that line since September.
Regular gas now averages $4.32 per gallon nationwide, and that number is about to get worse. Oil was on pace to gain roughly 5% over the week, which means the pain at the pump is already in the pipeline. Literally.
Wall Street noticed. The S&P 500 dropped more than 1% and the Nasdaq sank 2% by midafternoon. Nothing says a healthy economy like everyone's portfolio flinching because the guy in charge keeps pulling levers that don't connect to anything.
Two Wars, One Very Expensive Problem
Here's how we got here. The U.S. and Israel attacked Iran in late February, and the Strait of Hormuz shut down. Fuel prices have been climbing since spring, because it turns out a huge share of the world's oil has to squeeze through one narrow waterway and nobody planned for that going sideways.
Then the Russia-Ukraine war escalated, and diesel got hit even harder. Russia is traditionally one of the world's biggest diesel exporters. Ukrainian strikes on its energy infrastructure knocked a big chunk of its refining capacity offline, and Russian strikes have been hammering Ukrainian energy assets in return.
Buyers who used to get Russian diesel have to shop elsewhere. There is no elsewhere. Refineries in the U.S. and Europe are already running at close to maximum capacity, so there's no easy way to make more.
Why Diesel Is the Real Panic Button
Diesel doesn't get the attention gasoline does, but it's the stuff that moves the economy. Farming runs on it. Trucking runs on it. Industrial work runs on it. When diesel gets expensive, the price of nearly everything else follows, which is why it has risen even faster than regular gas in recent months.
And that's the real reason the White House is sweating. Inflation is a top issue for voters ahead of the Nov. 3 midterms, and diesel is the fuse. Trump is intensely focused on it, per NBC, because he can read a poll.
The Playbook of Things That Didn't Work
Trump tried pressuring U.S. allies to release some of their diesel and crude reserves. Prices stayed high. He signed an order easing regulations on off-road "red dye" diesel. Prices stayed high.
So he escalated, and the escalation was a gift to Moscow. This month he eased U.S. sanctions on Russia, with the stated goal of letting Putin release some of Russia's supplies onto the global market. The theory is that a relieved Putin will pour out fuel and prices will fall.
The sanctions relief stunned world leaders and drew swift condemnation from lawmakers in both parties. When Republicans and Democrats agree that you've made a mistake in the same week, you have really cooked something.
Putin Got the Deal, You Got the Receipt
Trump has touted the arrangement as a way to lower prices. Fine. Where's the diesel? As of Friday, no actual Russian diesel had been identified as having reached the global market.
Remember the other problem, the one that started this mess. Ukrainian strikes have taken much of Russia's refining capacity offline. Lifting sanctions doesn't rebuild a refinery. You can hand a man a permission slip to sell fuel, but if his plants are on fire, the permission slip is just paper.
So the administration traded a major piece of leverage over a hostile government for a promise of fuel that physically may not exist. The leverage is gone. The diesel is theoretical. The price is $109 a barrel.
The Dingo Take
The plan, as best anyone can tell, was to reward Vladimir Putin in the hope that he would then be generous. That is the entire strategy. It has been tried before, usually by people who ended up in history books for the wrong reasons, and it has now been tried by a man who thinks the Strait of Hormuz is a negotiating position.
Look at the sequence. Two wars drove up fuel costs. Trump leaned on allies, which did nothing. He loosened a dye regulation, which did nothing. Then he gave a sanctions break to the country whose refineries are currently burning, and he called it a price fix. Brent is at $109, WTI just touched $100, and the diesel that was supposed to rescue us has not been spotted anywhere on Earth.
The midterms are on Nov. 3. Every farmer, trucker, and commuter who just watched the pump climb past $4.32 is going to remember who promised them relief and who gave Putin a gift basket instead. Congress is already furious, in both parties. That should tell you how thin the explanation is. If you can't sell a deal to the guys who usually defend you, you can't sell it to the guy filling his tank.
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