Does the blue wave mean lower gasoline and diesel prices soon?
asserted
wave → mean → prices
Don't hold your breath
Democrats are now poised to take control of Congress by wide margins — and a critical driver of their success has been voter fury about how the war in Iran has driven up the cost of fuel.
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war → hold → fuel
Before the war, about one fifth of the world's oil passed through the Strait of Hormuz.
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fifth → pass → Hormuz
As the war throttled that waterway, the price of oil rose: A barrel of Brent crude cost about $70 in late February, spent months hovering around the $110 mark, and is now close to $95.
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barrel → throttle → mark
That's driven up the price of everything that's refined from crude.
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that → drive → crude
A gallon of gas costs $4.12 on average — about $1 higher than a year ago
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gallon → cost → 4.12
The price of diesel hit a record high in September at $6.52, and while it's fallen a bit since then, a gallon remains about $2.50 higher than this time last year, according to AAA.
uncertain
gallon → hit → AAA
These soaring prices helped major oil companies rake in huge profits over the past two quarters, while making the cost of fuel at the pump uncomfortably high for drivers, and boosting the price of nearly everything in a nation that is heavily reliant on trucking.
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that → soar → trucking
So now that the midterm results are in, could drivers see lower gasoline and diesel prices anytime soon?
uncertain
drivers → see → prices
Not so fast, experts say.
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experts → say → ?
Nothing yet — members of the new Congress won't be sworn in until January.
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members → swear → January
And once they are seated, U.S. legislators have limited powers to directly affect the price of oil, which is dictated by a complex global market.
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which → seat → market
In the run-up to the election, most of the actions taken by the federal government to lower fuel prices came through the White House, not Congress.
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most → take → House
Hoping to stave off losses for his party, President Trump tried to ease the cost of diesel by loosening federal rules on dyed diesel, which is normally used for farming.
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which → hop → farming
He also announced a deal that would bring more Russian diesel to global markets, including the U.S., by temporarily lifting sanctions.
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that → announce → sanctions
Neither of these did much to move the needle.
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Neither → do → needle
But the new Congressional Democrats will have the power to push the president to end the war in Iran, in part by making it harder to authorize new war spending.
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it → have → spending
Senate Minority Leader Chuck Schumer (D.-NY) told reporters on Wednesday that Democrats are intent on ending the war and bringing down the cost of living, saying that "relief is on the way."
"What a unified Democratic Congress can do is make escalation considerably more costly: both chambers can pass resolutions, attach conditions to war spending and hold back confirmations of key officials," Claudio Galimberti, chief economist of Rystad Energy, wrote in a market note to the media.
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Galimberti → tell → media
Still, the president has veto power over legislation, as well as executive powers.
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president → have → legislation
" President Trump still retains full discretionary authority over military strikes, over blockades and sanctions, licenses, and so on," said Jorge León, head of geopolitical analysis at Rystad Energy, in an interview with NPR.
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León → retain → NPR
Trump has sent mixed messages about whether he wants to end or escalate the war.
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he → send → war
In the past few weeks, he warned Gulf Arab countries to prepare for a new military campaign after the midterms.
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he → warn → midterms
The U.S. struck Qeshm, an island in the Strait of Hormuz that Iran uses to launch its own strikes, on Nov. 2.
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Iran → strike → Nov.
But on election night, Trump told The New York Times that he knew voters were unhappy about gas prices.
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voters → tell → prices
And the next day, as the extent of the election rout became clear, Vice President JD Vance posted on social media: "The reason we lost is the war."
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we → become → media
If the war ends, when would prices fall?
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prices → end → ?
Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, says if there's a deal to end the war, traders could be very excited.
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traders → say → war
Brito said they might look for formal announcements from both Iran and the U.S. that the strait is reopening, and that both sides are pulling back their military presence in the area.
uncertain
sides → say → area
If market traders are convinced the peace will last?
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peace → convince → ?
"If that scenario happens, then I personally see crude prices dropping, you know, $15, $20 [a barrel] immediately, in the next two, three days from the announcement," he said.
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he → happen → announcement
But for gasoline and diesel prices to fall, too, oil would have to start moving again.
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oil → fall → ?
Ships that have been running long, alternative routes to avoid passing through the Strait of Hormuz would have to return to their points of origin, and then resume their former routes through the strait.
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that → run → strait
León pointed out, that could lead to traffic jams.
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that → point → jams
From there, that crude will still need to be refined and make its way onto the market.
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crude → need → market
In the most optimistic scenario, Brito said, it could take three months after a ceasefire or deal is announced for gasoline and diesel prices to hit their prewar levels.
uncertain
prices → say → levels
León thinks it would take more like six months for the price of crude to hit its prewar level, and then another month or two for gasoline and diesel to follow.
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gasoline → think → level
But that's assuming all goes well.
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all → assume → ?
And, both of them said, there could be hiccups along the way that stretch the recovery timeline out for up to a year after a deal is announced.
uncertain
deal → say → year
I don't want to say this, but, you know, expensive gasoline prices could be a new normal," Brito said."
The X factors
The first big X factor: the war in Ukraine.
uncertain
Brito → want → Ukraine
If Ukraine continues attacking Russian refineries
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Ukraine → continue → refineries
…and 14 more, not listed.
The Aporia
