A few weeks after US President Donald Trump signed a law expanding sanctions on Russia [hell sanctions] his administration issued a general license allowing American companies to buy Russian diesel. The agreement Trump reached with Russian leader Vladimir Putin on diesel purchases drew sharp criticism from both Republicans and Democrats in Congress. So what pushed the United States into such an abrupt move?
The root cause is a global diesel shortage. Since February, after the war against Iran began, only about a quarter of the usual volumes have passed through the Strait of Hormuz, which in peacetime handled roughly 20 percent of the world's oil and gas supplies. At the same time, strikes on Russian refineries knocked out a large share of capacity.
For the United States, the consequences were immediate. The country is still the world's largest diesel exporter, but its stocks fell sharply, and the retail price reached a record $6.53 per gallon on September 22, almost double the level a year earlier. Because diesel powers freight transport and farm equipment, higher prices feed straight into the cost of food and logistics.
According to Pew Research Center, the economy is the top issue for 84 percent of registered voters. The midterm elections on November 3 are only weeks away, and traditionally Republican farm states such as Iowa and Kansas have ended up among the contested ones. Hence the administration's desire to demonstrate to voters a concrete result regarding fuel prices.
Added concern over energy supplies comes from the situation in the Middle East. This past Sunday, Yemen's Houthis reportedly struck King Khalid International Airport in Riyadh, Saudi Arabia, twice with missiles. Twelve people were killed.
Because foreign nationals were reportedly among the dead, a number of states led by the United States urged their citizens to avoid travel to Middle Eastern countries. The way events are unfolding points to a further deterioration of the military and political situation in the region. It also raises the likelihood that the Strait of Hormuz will stay closed and that world fuel prices will remain high.
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