Trump doesn't seem to like America

Trump has said it for years: he made us the world’s leading energy producer, and he gets the credit for it from his first term. Now he’s made a deal with Putin to sell Russian diesel to us and the rest of the world. Republicans are against it, and the money is going to fund the war in Ukraine.

So if we produce so much oil, why are we doing this? I know, the Strait of Hormuz. But still.

The deal

On Friday night, after a call with Putin, Trump announced that Russia would “immediately” supply more than 300,000 tonnes of diesel to the US and global markets, with 500,000 tonnes more in November and a million after that. Treasury issued a temporary license to let it through. “Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” he wrote.

The prices are real. Diesel averaged $6.27 a gallon on Monday, up from $3.67 a year ago. The midterms are three weeks out.

But Congress banned Russian energy imports in 2022, and about three weeks ago Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act. Seven senators, four of them Republicans — Murkowski, Collins, Tillis and Curtis — told the administration to “immediately reverse course.” Tillis said there’s “a legitimate case for saying the President’s not following the law.” Don Bacon put it plainly: “We need lower diesel prices for American farmers, ranchers and consumers, but buying Russian fuel is the wrong answer.”

The credit

The production record is real too. The EIA expects US crude to average a record 13.8 million barrels a day this year, beating last year’s record.

The credit is the shakier part. Going by EIA data, PolitiFact found the US has led the world in natural gas since 2009 and in oil since 2013. That was the shale boom, and it started under Obama. Trump inherited the lead and kept it.

Oil isn’t diesel

Here’s the answer to the question. Crude oil comes out of the ground. Diesel comes out of a refinery, and the refineries are the problem.

• They’re full. US refineries ran at roughly 96% of capacity last quarter. There’s no spare room to run more crude through.
• There are fewer of them. Refining capacity started this year about 250,000 barrels a day smaller than the year before.
• They make what they were built to make. About 30% of what a US refinery turns out is diesel and heating oil, and about 46% is gasoline. You can’t turn a knob and double the diesel.
• We sell it abroad. The US is the world’s largest diesel exporter. Distillate exports hit 1.56 million barrels a day in the second quarter, 30% above the five-year average, because the rest of the world is short too and pays more. Trump has said he will “not impose a ban” on exports.

American oil refiners don’t sell diesel to us cheaply. They sell it elsewhere for maximum profit. Now we buy from Putin.

So the stockpile runs down. The EIA expects diesel and heating oil inventories to fall below 100 million barrels, the first time in more than two decades, and stay low through much of 2027.

And yes, Hormuz. Iran choked off the strait after the US and Israel struck it in February. Crude is moving through it again, but the refined fuel isn’t, and the Gulf refineries that used to send diesel to the world are sending a fraction of it. Hormuz is the reason the world is short. It’s not the reason we are.

Who it helps

Russia doesn’t have much diesel to spare. Ukraine has been hitting its refineries, and Russia banned its own diesel exports in July. Its diesel and gasoline exports fell from 850,000 barrels a day in the first quarter to 190,000 in the third. One analyst said the volumes in Trump’s deal “don’t really move the needle very much” on prices.

So it won’t do much for the farmer. What it does is hand Putin a buyer, and the American president’s blessing, right when Ukraine has been squeezing that exact source of money. Murkowski said it lets Russia “rake in revenues.” The EU’s foreign policy chief said it gives Moscow more money to wage war.

Who pays

He said he made us the world’s leading energy producer. The strait closed after we struck Iran. And the fix is a check to Putin.

So we’re paying for his mistakes. Literally. Paying a dictator, at $6.27 a gallon.

We’ve been sold, by one to another.

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The photo

That pump jack at the top is by Jan Zakelj, a photographer in Patagonia. Go look at the rest of Jan’s work. There’s a ship, and some cats, and they’re unreal. Inspiring. I want to take photos like this.

We love these artists. They go out and get the shot, and then they let the rest of us use it for free.

Sorry I used AI for images here before, in haste. Thanks, Jan.