The energy crisis triggered by the US-Israeli war against Iran has become one of the most significant economic and political challenges facing Donald Trump’s administration. Repeated presidential promises to bring the situation under control have failed to ease the crisis, while releasing strategic reserves and seeking to increase diesel supplies have proved far from straightforward solutions.
On the other side of the equation, Iran is pursuing its strategy of “encircling the blockade” and expanding its maritime warnings in an effort to extend the costs of US pressure beyond its own export routes and link them to the broader equation of international energy security.
From the Strait of Hormuz to an Expanding Scope of Threats
In September, Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, outlined the strategy of “encircling the blockade.” Under this approach, the US naval pressure campaign should not remain a unilateral measure that Washington and its allies can pursue without consequences.
The Islamic Revolutionary Guard Corps (IRGC) subsequently warned that vessels deviating from designated routes would be targeted, even outside the Strait of Hormuz and the Persian Gulf.
The significance of this approach lies not merely in the expansion of the potential military threat. The central issue is the growing uncertainty surrounding the energy transportation chain. As the risk of attacks on oil tankers increases, insurance premiums, freight rates, delivery schedules and shipping companies’ decisions about entering the region all come under pressure.
A Reuters report on October 7 showed that attacks on tankers transiting the Strait of Hormuz had reached their highest weekly level since the start of the war in the previous week. The report came as regional countries were trying to increase oil exports, efforts that were being accompanied by rising maritime risks.
The energy conflict, therefore, is no longer just about how much oil is produced or exported. The perceived safety of transporting cargoes has become a decisive factor in determining their final cost.
The Diesel Crisis: A Vulnerable Point in the US Economy
Meanwhile, rising prices for refined petroleum products, particularly diesel, have placed additional pressure on the US economy. Contrary to the perception that diesel is merely a fuel for trucks, it plays a vital role in freight transportation, agriculture, food supply chains and parts of the industrial sector. Higher diesel prices can increase production and distribution costs, feeding into consumer inflation through multiple channels.
According to a Reuters report on October 9, diesel prices in the United States had reached $6.28 per gallon, approximately 70% above their prewar level. With the November 3 midterm elections approaching, the increase carries particular political significance for Republicans and the Trump administration.
Disruptions to Middle Eastern oil supplies, damage to refining infrastructure, the Russia-Ukraine war and limited access to finished petroleum products have all contributed to the current situation. However, the Strait of Hormuz crisis is the most significant factor among these interconnected pressures.
What makes the crisis more complicated is that these factors are occurring simultaneously, while the diesel shortage is difficult to offset quickly.
Strategic Reserves: A Temporary Remedy for a Turbulent Market
In recent weeks, Trump has sought to ease market pressure through emergency measures and efforts to influence market sentiment. These steps have included pressuring European countries to release diesel stocks, supporting increased supplies of refined products and backing the Group of Seven’s decision to accelerate the release of oil reserves.
The objective is clear: inject additional supply into the market, ease concerns about shortages and prevent the energy shock from being fully passed on to fuel prices and household living costs.
However, releasing reserves is not the same as resolving a supply crisis. Strategic reserves are designed to manage temporary disruptions and cannot, on their own, provide a lasting substitute for production, refining capacity and secure transportation routes.
Moreover, releasing crude oil does not necessarily translate into an immediate increase in diesel supplies. Turning crude into the refined products the market needs depends on refinery capacity and operating conditions.
As a result, such decisions may have a noticeable short-term impact, but a sustained decline in prices requires a reliable and continuous flow of supply.
Green Light for Russian Diesel: A Shift Under Market Pressure
Trump’s latest move to reach an agreement with Vladimir Putin to increase Russian diesel supplies is one of the clearest signs of how the energy crisis is influencing decision-making in Washington. The US administration, which had previously imposed sanctions on Russia’s energy sector to restrict Moscow’s revenues, has now issued a temporary authorization for transactions involving Russian diesel and its import.
On October 9, Trump said Russia would initially supply more than 300,000 metric tons of diesel to the US and global markets, with additional shipments planned for the coming months. Following the announcement, US diesel futures fell, indicating that the market had responded, at least in the short term, to the prospect of increased supplies.
However, the initial price reaction should not be mistaken for a resolution of the crisis. Energy market analysts have expressed serious doubts about whether the agreement will be sufficient to bring prices down sustainably. The actual volume of shipments, delivery schedules, the condition of Russian refineries and the feasibility of maintaining exports will all determine its effectiveness.
The decision also drew criticism from Ukraine. Volodymyr Zelenskyy described the agreement as a move that benefits Moscow, highlighting the conflict between two US objectives: easing domestic fuel-price pressures immediately and continuing to restrict Russia’s energy revenues.
Russia: More Supply Amid Refinery Damage
One of the main questions surrounding the new agreement is how much Russia can actually increase its exports. Ukrainian attacks on Russian energy infrastructure, combined with domestic demand, have affected the country’s capacity to supply refined products. Russia has even become an importer of gasoline.
According to an S&P Global report on October 9, Russian diesel exports averaged around 1 million barrels per day in the first half of the year, but the average fell to approximately 550,000 barrels per day from July onward. These figures indicate a sharp decline in Russia’s export capacity in recent months.
Therefore, even if Moscow signals its political willingness to increase exports, the extent to which it can deliver will depend on actual refining capacity and the ability to ship the products. Promises to supply several million tons of diesel cannot, by themselves, reassure the market unless they translate into a real and sustained flow of shipments.
Meanwhile, reports indicate that Ukraine continues to attack Russian refineries. This could make the agreement more difficult to implement and underscores how Trump’s proposed solution also depends on developments on the battlefield of another war.
Energy Markets Cannot Be Managed by Promises
Taken together, these developments highlight a fundamental economic reality: energy prices do not depend solely on politicians’ statements or announcements of new agreements. Markets respond to actual supply volumes, delivery speed, refining capacity and the level of risk along transportation routes.
In recent months, Trump has repeatedly sought to reassure markets by claiming that the Strait of Hormuz remains open and that 22 million to 28 million barrels of oil pass through it daily, at times citing figures even higher than prewar levels. None of these claims has been independently verified by the relevant independent sources. Repeatedly making such assertions has also diminished their psychological impact on the market and may even have produced the opposite effect.
On the one hand, Trump has intensified naval and sanctions pressure to restrict Iranian oil exports. On the other, he has been forced to turn to reserve releases, pressure on allies and measures facilitating Russian diesel supplies to bring down domestic fuel prices. The simultaneous pursuit of these policies shows that political tools alone cannot manage an energy crisis, particularly in refined-product markets.
Iran’s strategy of “encircling the blockade” must also be understood in this context. Continued maritime pressure will increase regional transportation risks and costs, with consequences extending beyond Iran’s own exports and reverberating across global energy markets.
Trump’s challenge is not simply to find additional diesel cargoes. The central task is to restore confidence in a market facing simultaneous supply disruptions, infrastructure damage, geopolitical constraints and rising transportation costs.
Until these factors are addressed, any agreement or release of strategic reserves may ease some of the pressure, but neither can guarantee a sustained return to pre-crisis price levels.
