Endless war, energy shocks, recession: a breaking point is near, but all Trump can do is lie
When the price of diesel is this high, every price is high.
Some things that are broken cannot be fixed. Let's hope the price of diesel isn't one of them. The national average hit $6 on Friday, the highest it has been. Until today, when it hit $6.23. (Diesel was $5.85 per gallon two weeks ago. It was $3.71 this time last year, according to AAA.)
"Higher diesel prices mean more expensive transportation for a long list of everyday goods," the Associated Press reported on Friday. "That’s because diesel is used for many freight and delivery networks. And some businesses have already passed along steeper costs to consumers in the form of added fees on online orders and packages in the mail."
When the price of diesel is this high, every price is high.
A breaking point seems near.
How did we get here? The reason is obvious: Donald Trump's illegal war against Iran. In retaliation, Iran shut down the Strait of Homuz. The move squeezed the global supply of oil, raising gas and diesel prices. The AP ran a graph that clearly shows the cause-and-effect.
In response to bad headlines and pain at the pump, the president and his team spent the weekend doing what they do best: finding a scapegoat. In this case, it was Volodymyr Zelensky. Trump said Ukraine's attacks on Russian diesel facilities are causing shortages.
"Mr Zelenskyy has to do one thing – he has to stop knocking out diesel fuel in Russia," Trump said Sunday. "He's causing a shortage of diesel fuel. This isn't done by the Middle East, this is done by what's happening with Russia and Ukraine. ... There are plenty of other targets."
The US does not import diesel from Russia. It does not import much diesel at all. Ninety-seven percent of diesel bought in the US is refined here, which means the main cause of domestic shortages is "done by the Middle East," ie, Donald Trump's illegal war against Iran.
GasBuddy's Patrick De Haan told CNN over the weekend Ukraine's attacks are having some effect on global diesel supplies, but they are part of the broader context of war and oil prices.
"I don't know when the story is going to end," De Haan said, "but it gives me chills that after six months [of war] we are still here in the same boat, a boat that continues to slowly sink."
Chris Beauchamp, chief market analyst at IG Group, told Al Jazeera that Ukraine's attacks are a "small ingredient” in the larger story. The US stopped importing Russian diesel after Russia's invasion in 2022. US military action in the Middle East is the chief trigger of the diesel shortage, which “threatens to tip the world economy into recession," Beauchamp said.
According to oilprices.com, the chance that the Federal Reserve will raise interest rates next week is over 72 percent "as energy-driven inflation pressures intensify." The report said Goldman Sachs puts the risk of recession "at just 15 percent," but the bank "warns another major energy shock could weaken consumer spending, growth and raise recession odds."
As if on cue, Saudi Arabia shut down a pipeline that was rerouting oil so that it didn't have to pass through the Strait of Hormuz. Drone strikes from Iraq were blamed, though that seems suspect. Reuters said on Sunday the kingdom "will run out of oil stocks for exports if it doesn't restart" the pipeline "within days." That would cause a 4 percent drop in oil supplies.
Capitol Hunters said today a 4 percent drop would recall the oil-shock days of the 1970s.
"What's the big deal about the 4 percent cut in global oil production next week? That's the scale of the 1973 OPEC crisis and 1979 Iran war oil crisis. Each [was] followed by a major recession. Prices and supply are global. Global oil stocks are already gone. It's a calamity."
Capitol Hunters added that it would be "a global recession-producing event."
When it comes to the Iran War, there is no plan. There is no strategy. There is no vision. The president can't win the conflict militarily. He won't attempt to win it diplomatically. He started the whole thing to make himself look big and strong on television. Half a year later, allies are alienated, enemies are emboldened. The situation is so bad Pentagon leaders have resigned themselves to placating his ego. The war is out of control. All he can do now is lie.
The lies are not working. Sixty-five percent blamed him for the high price of fuel, according to a Q Poll taken in April, before the war reached the half-year mark last month, and before diesel hit a historic high today. Even Trump seems to know they aren't working. Last week, he seemed to admit he is powerless to lower prices in time for the congressional elections.
"Right after the election, oil prices are going to be tumbling downward,” the president said Wednesday, adding that “I think it’s going to take a little bit longer than the midterm.”
Trump's desperation is showing. He ordered the Post Office to change mail-in voting rules. He offered to bribe voters. (If the GOP wins, every adult citizen gets $5,000, he said.) He even asked his supporter to "cheat like hell." The Post said the greatest threat to the midterms could come from election officials who, under Trump's direction, "are contemplating ideas that once sounded outlandish, such as troops seizing voting machines, the president dictating last-minute election rules or rogue officials blocking the certification of results."
Whether the Republicans win or lose, however, three things seem certain.
The war will go on, indefinitely.
The president will continue lying about it.
The rest of us will keep paying the price until something breaks.
