US President Donald Trump has teased a major announcement on diesel as fuel prices remain near record highs, adding pressure on the administration weeks before the November 3 congressional midterm elections.
"We have a big announcement coming up on diesel," Trump said at a White House event on Friday, without providing details. "We have, I think, some big news on that diesel situation. We're going to be knocking the hell out of it."
According to Reuters, US diesel prices have surged 70% since the US-Israeli war on Iran began, despite recent efforts by Trump to increase supplies. These measures include pressuring allies to release emergency fuel reserves and expanding access to tax-exempt, red-dyed diesel.
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The spike in fuel costs comes as voters prepare to decide control of Congress in the November elections, making energy prices a significant economic and political concern for the administration.
Oil prices declined on Friday as concerns over potential disruptions to Middle Eastern supplies eased after Trump said the US would not attack Iran before the midterm elections. He also described discussions with Tehran as "productive", raising hopes of progress towards ending the conflict.
Brent crude futures fell $1.10, or 1.1%, to $103.18 a barrel by 1328 GMT, while US West Texas Intermediate crude futures declined 49 cents, or 0.5%, to $91 a barrel. Brent remained on course for a weekly gain after settling 4% higher on Thursday, while WTI was set for a slight weekly decline.
Plans by China, the world's largest oil importer, to resume refined fuel exports after a brief suspension during its Golden Week holiday also weighed on prices, Reuters reported, citing sources.
PVM Oil Associates analyst Tamas Varga said Trump's comments on Iran and China's planned resumption of fuel exports were putting downward pressure on oil prices.
However, the market remains volatile amid growing threats to shipping in the Gulf and the Strait of Hormuz. Before the war, the strategic waterway carried shipments equivalent to around 20% of global oil and fuel supplies.
Iran's Tasnim news agency reported on Thursday that Foreign Minister Abbas Araqchi said Tehran was reviewing Washington's response to an Iranian proposal to reopen the Strait of Hormuz within seven days.
Meanwhile, Washington continues to apply economic pressure on Iran, announcing sanctions targeting individuals, networks and 17 vessels involved in transporting Iranian crude, petroleum products and petrochemicals.
The conflict involving Iran, alongside the Russia-Ukraine war, has disrupted supplies of refined fuels, including gasoline, jet fuel and diesel.
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The squeeze has also been compounded by Hurricane Isaias in the Gulf of Mexico. According to the US Marine Minerals Administration, producers had shut in around 1.3 million barrels per day, or 62.9%, of current oil production as of Thursday.
The combined disruptions have contributed to a severe global fuel supply crunch. Average US diesel prices reached $6.28 a gallon on Thursday, according to the American Automobile Association (AAA), Reuters reported.
Trump's promised announcement could signal another attempt to ease the pressure on diesel supplies, although the president has yet to disclose what measures his administration plans to introduce.
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