Can Trump Lower Fuel Costs Ahead of the Midterms?
US gasoline and diesel prices have doubled since the Iran conflict began, prompting Donald Trump to push for fuel cost cuts ahead of the midterms.
Stock photo for illustration only, not from the actual event
- US gasoline and diesel prices have more than doubled since February due to geopolitical tensions.
- President Trump announced a temporary waiver on red dye diesel and urged state tax cuts.
- G7 countries released 100 million barrels of oil and diesel from reserves to ease supplies.
- Analysts warn that these government interventions offer only short-term relief.
Prices for gasoline and diesel in the United States have more than continued to soar, more than doubling since the US-Israel conflict with Iran began in February. This sharp surge has heavily impacted transport businesses, agricultural sectors, and everyday drivers across America, creating growing political pressure ahead of the critical midterm elections.
With voters increasingly linking the rising costs of fuel and everyday goods to President Donald Trump and his party, the administration has rolled out several announcements aimed at bringing costs down. Polls indicate that a majority of American voters disapprove of how the administration has handled the broader economy and the ongoing war in Iran.
Stock photo for illustration only, not from the actual event
Global oil supplies have remained tightly restricted ever since Middle Eastern conflict effectively halted the flow of crude and refined products through the Strait of Hormuz for months. Although the flow of crude oil is nearly back to pre-war levels, prices remain firmly above $100 a barrel. David Ruisard, a pricing manager at commodities intelligence firm Argus, points out that the ongoing war between Russia and Ukraine has also severely strained oil supplies, driving prices even higher.
Patrick De Haan, head of petroleum analysis at GasBuddy, noted that modest recent declines have been observed for both gasoline and diesel following presidential actions. This week, the administration announced it would permit red dye diesel—which is normally reserved for off-road machinery and exempt from federal taxes—to be used on US highways temporarily without federal levies. However, Ruisard cautioned that trucking companies could face steep tax evasion fines once this temporary relief measure expires.
"Our estimates are that your price increase from about $3 a gallon up to $6 a gallon [for diesel] is 60% connected to the Strait of Hormuz, 40% connected to the Russia-Ukraine conflict."
David Ruisard, Argus
Another move initiated by Trump has gained more traction among market analysts. Last week, following intense pressure from Washington, G7 nations announced the release of 100 million barrels of oil and diesel from strategic stockpiles. De Haan explained that the announcement alone has effectively worked to push prices downward to a certain degree, although Oxford Economics chief US economist Michael Pearce warned that this remains merely a temporary fix.
From an analytical perspective, deploying short-term energy price interventions such as emergency reserve releases or fuel tax suspensions serves primarily as political leverage during election cycles. While these measures temporarily alleviate immediate consumer pain at the pump, they fail to resolve the underlying geopolitical bottlenecks driving long-term global energy volatility.
Stock photo for illustration only, not from the actual event
Trump has also previously contemplated suspending the federal gasoline tax entirely, though De Haan noted that achieving congressional approval ahead of the midterm elections remains a steep challenge. Several states, including Ohio and Georgia, have already moved forward with cutting their own state-level gasoline taxes. In Indiana, which implemented a tax cut in May, the state government absorbed roughly $1bn in lost revenue. Furthermore, while a proposed export ban on US diesel might offer regional relief in the Gulf and Midwest, Pearce warned it risks backfiring by depleting domestic storage and forcing refineries to ultimately cut back on production.
Source: BBC Business
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