Oilprice.com says two Trump decisions will set this weekend's energy risk: whether to keep U.S. firepower out of Saudi Arabia's war with the Houthis, and what to do about a Russian diesel license. In both, it argues, he is giving up leverage to chase lower pump prices before November 3.
Oilprice.com argues that two Trump decisions will set this weekend's energy risk, and that in both he is giving up leverage to chase lower pump prices before November 3. The first is staying out of Saudi Arabia's war with the Houthis. The second is the license for Russian diesel.
Houthis hit Aramco headquarters and Riyadh airport
The Houthis hit Aramco's Dhahran headquarters on Tuesday night and have kept Riyadh's main airport shut until Saturday. Last Saturday, a missile hit King Khalid's terminals in Riyadh and killed 13 people, an American among them.
Washington's rule since September is that it stays out as long as the Houthis hit only Saudi targets. More than 200 U.S. intelligence and military personnel help Saudi commanders pick Houthi targets, and U.S. tankers refuel Saudi jets, but Trump isn't sending U.S. jets. Oilprice.com expects more Houthi fire at Saudi airports and Aramco, and an oil price that keeps a Saudi risk premium.
Russian diesel license faces its first test
The license faces its first test on October 18, the deadline in the Russia sanctions law Trump signed a month ago for duties of up to 500% on Russian petroleum products. General License 135 runs until April 7, 2027, with no volume cap and no named buyers.
Trump has announced 300,000 tonnes now, 500,000 in November and 1 million after that, about 13.5 million barrels in all. The first tanker, about 40,000 tonnes of ultra-low-sulfur diesel, was loaded at Primorsk on October 13 and is headed for Morocco.
Diesel averages $6.28 a gallon as Brent sits above $100
Diesel averages $6.28 a gallon, and wholesale prices have not moved. September CPI came in at 3.7%, and gasoline accounted for more than half of the rise.
Russian diesel does nothing for gasoline, and nothing for crude, while Brent sits above $100, according to Oilprice.com.
Meanwhile, Zelenskyy has resumed refinery strikes, and Ukrainian drones set Rosneft's Ryazan refinery on fire overnight. Oilprice.com says Russia has no spare refining capacity, so every plant Ukraine hits comes out of the diesel Trump is counting on before November 3.
Source: Oilprice.com
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