A projectile struck a tanker in the Strait of Hormuz on Monday, sparking a fire in the engine room. The crew is fighting the blaze, according to the UK Maritime Trade Operations agency (UKMTO), which issued its 10th incident notice since October 1. The attack underscores the mounting risks to shipping in the world's most critical oil chokepoint.
Trump Points to Refineries, Not Hormuz
President Donald Trump said on Truth Social that the Strait of Hormuz is no longer the reason Americans pay more for gas. He blamed refineries instead, writing: '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.'
His comments came as Middle East crude exports averaged 18.5 million barrels a day in the week to October 1, above pre-war levels, according to Kpler data. Yet oil prices have surged since US and Israeli strikes on Iran. US crude sat near $66 a barrel on February 27, the last trading day before the strikes, and ended Monday near $91.57, according to TradingView data. Brent, the global benchmark, rose from about $67 to $104. Wholesale gasoline climbed from about $2.30 to $3.20 a gallon.
At the pump, regular gasoline cost $4.37 a gallon on Monday, up from $3.13 a year ago, according to AAA.
Diesel Squeeze Deepens as Russian Refineries Burn
Ukraine’s drones have battered Russian refineries, and the International Energy Agency (IEA) says Russian diesel output fell nearly 30%. Moscow has banned diesel exports by producers through October 31. That's tightened global supplies. US diesel cost $6.32 a gallon, nearly $2 more than gasoline. Banks have warned a US diesel export ban would push gasoline higher still.
California Refineries: A Small Slice of US Capacity
California’s two closed refineries processed about 284,000 barrels a day, according to the Energy Information Administration (EIA). But together they account for under 2% of US capacity, the EIA says. That's a sliver of the national total, yet Trump singled them out as a culprit for high pump prices.
G7 Taps Emergency Reserves
On Monday, the Group of Seven (G7) agreed to release 100 million barrels of emergency oil. The move aims to calm markets roiled by supply fears and the ongoing tanker attack. It's the latest attempt to keep a lid on prices as the midterm elections approach on November 3.
For now, the tanker fire in the Strait of Hormuz is still burning. The UKMTO hasn't said who fired the projectile or whether the crew has contained the blaze. The G7 release will take time to reach refineries and drivers. Whether it cools prices before voters head to the polls is an open question.
