Trump restarted a war that fills refiners’ pockets at the pump.
I watched the diesel price climb at the station on the way to the co-op this week, and I have watched enough fuel spikes to know what one does to a one-man shop in a county like this. Diesel moves everything. It moves the groceries to the shelf, the feed to the lot, the lumber to the yard, and the parts to my bench. When diesel goes up a dollar, every invoice in the county goes up with it, and the man who absorbs the difference is the man who cannot pass it on.
The price did not have to be this.
The administration launched a war with Iran and the supply shock knocked out roughly five million barrels a day of refining capacity between the Middle East and Russia. The Strait of Hormuz is stymied. Saudi oil exports to the United States fell to zero in July, the first month in the federal record since 1985. The war created the bottleneck, and the bottleneck created the price.
The average gasoline price is $4.06 a gallon. On Tuesday, the president told a Fox audience that his negotiators were close to a deal that would bring it down to $2.50.
Two-fifty.
He is asking the public to believe that the country the administration is currently fighting is about to become the country the administration says will solve the problem.
The supply shock is real. Ukrainian drone strikes have knocked about a third of Russia’s refining capacity offline. China has cut fuel exports from as much as 900,000 barrels a day in recent years to about 350,000 now. The world’s refined-fuel inventories are about 130 million barrels below normal for this time of year, according to Valero’s chief operating officer. Traders cannot find enough Chinese barrels to replace them.
Those facts explain the shortage. They do not explain why the administration wants the public to confuse a shortage with proof that its energy program is working.
The earnings show the shape of it. Marathon Petroleum took in $5.1 billion in the second quarter, quadrupling its profit from the same period last year. Valero booked $3.7 billion, more than five times what it made the year before. Phillips 66 collected $3.8 billion, more than four times its previous-year profit. Exxon reported $14.5 billion overall, and $5.5 billion of that came from refining alone—four times what it made from that operation the year before.
The refiners are running at 97.2 percent of operable capacity, a level federal data say the country has not seen since 2018. Diesel exports hit a record 1.9 million barrels a day last week. American diesel stocks fell by 3.5 million barrels. Gasoline stocks fell by another 1.6 million. Commercial and strategic crude stockpiles dropped to their lowest level in 42 years.
The refiners are not failing.
They are collecting the value of a bottleneck.
None of this is against the law, and none of it is a mystery. A refinery is a business. It makes what the market makes it. The problem is that the public is told to treat the market as a patriotic machine when prices are low and as somebody else’s corruption when prices are high.
The administration’s spokeswoman blamed “Democratic climate policies” for “shuttered refineries across the country.” Some refineries did close under policies the administration dislikes. That is the true half.
The rest of the record is harder to chant. More than two dozen American refineries have closed since 2000. The country’s fuel-making capacity is 3 percent below its 2019 peak. Refiners are operating nearly flat out because the refining base is smaller than it was seven years ago, not because a new administration has discovered an underground reserve of patriotic gasoline.
That is not a country that cannot refine.
That is a country that made refining scarce enough to be glorious.
Main Street Independent has already documented the widening gap between crude prices and the gasoline price American drivers actually face. Crude oil still matters. So do refining capacity, inventories, transportation, and global demand. The pump price is not a presidential mood ring.
The administration is taking a global supply failure and attaching it to an old domestic enemy. That is the Nationalist Shell Game from We Too Chapter 16: promise national control over a system that remains dependent on foreign crude, foreign shipping routes, foreign refineries, foreign capital, and a global price. Call the result “energy dominance,” then ask American workers to accept the bill as evidence of strength.
The United States is still importing crude from Canada and Venezuela. Saudi Arabia’s oil exports to the United States fell to zero in July, the first month in the federal record since 1985. American refiners are buying more crude from abroad and sending more refined fuel abroad at the same time.
That is not hypocrisy by itself. It is how a global petroleum market works.
The dishonest part is pretending it works differently.
There is a name for the maneuver, and you do not need a book to find it. The flag does the singing: “reliable, affordable and secure energy,” in the White House’s words. The multinationals do the pricing. The old chant was “drill, baby, drill.” The industry has a new one now.
Refine, baby, refine.
The president is chanting it at the pump while scolding the companies for what the chant brings in. The anger lands on the companies, and the war that caused the price goes on.
Wendell Berry named the deeper habit in The Unsettling of America: “Nuclear power, if we are to believe its advocates, is presumably going to be well used by the same mentality that has egregiously devalued and misapplied man- and womanpower.” The gadget is never the whole question. The culture holding it is.
“Refine, baby, refine” is the extractive mind with a fresh slogan. The culture that restarts a war and then demands that refining companies feel ashamed of their records runs on one principle: somebody else can pay the difference.
Somebody else is us.
The administration’s answer to the crunch is a proposed refinery complex in South Texas backed by India’s Reliance Industries. If it comes to fruition, it would be the first new refinery in the country in nearly fifty years. The flag supplies the speeches. The foreign multinational supplies the capital. Whoever holds the stock collects the return.
That is the whole energy-dominance platform in one paragraph.
A refinery takes years to permit, finance, build, and bring online. It does not lower next month’s gasoline price because a president announces it. The current shortage is being managed with the refining base the country already has, and that base is smaller than it was before.
For a county like Adams, four-dollar gasoline is the cheap part of the story. Diesel is what the county runs on: the feed truck, the milk truck, the plow truck, the logger’s rig, the truck hauling calves to the sale barn, and the truck bringing groceries down Highway 13. Diesel moves the parts that keep the John Deere running and the Honda generator ready when the power goes out.
Every dollar the war adds to diesel leaves the county. It does not buy school supplies or a vet call or a starter for somebody’s combine. It goes into a margin somewhere else.
In a county where median household income runs at about eighty cents on the state’s dollar, those dollars are not abstract. I drive the truck and heat the shop like everybody else. I am not standing outside this economy, describing its victims. I am inside it, paying the same sticker.
That is Worker Self-Exploitation at national scale. Every shop, farm, trucking company, and household is told to work around a system designed to charge more whenever the system is under strain. The mechanic absorbs the fuel cost. The farmer absorbs it in fertilizer and hauling. The grocery customer absorbs it in the price of food. The refinery collects the margin and calls the arrangement supply and demand.
The country needs fuel. It also needs a fuel system that does not turn every war, outage, and shipping disruption into a private windfall. Real energy security would mean maintaining enough refining capacity and fuel reserves for emergencies, preventing consolidation from turning a bottleneck into a tollbooth, and treating diesel and gasoline as infrastructure when the economy depends on them. Public support should carry public obligations. Refiners should disclose where the shortage premium goes.
This winter, the plow will run and the milk will move and the deer-camp trucks will line up at the pump in November, because a county that runs on diesel does not get to sit out a fuel spike.
I have read the number on the pump every week of my adult life, the way I read the ice on the lake. What is in front of me beats what is promised over the airwaves. My kids will learn to read a pump the same way.
I want them to know the difference between the price and the promise. The price is what the war and the margin put on the sticker. The promise is what a real deal delivered before it got torn up.
Out here, a generator that runs at full throttle until its tank is empty is not a reliable machine. It is a machine being used past its safe limit. When it fails, the shop down the road absorbs the cost.
That is what the United States is doing now: running the refining system flat out, draining the stocks beneath it, and calling the smoke from the exhaust energy independence.