Gasoline and diesel prices are rising in the wake of the administration’s sanctions on Venezuelan oil late last month, with the Trump administration saying it is ever-watchful of the rising price of crude oil.
The Energy Information Administration’s most recent oil analysis released on Wednesday shows the average price of gasoline rising seven cents in the last week, with prices in the Midwest and East Coast exceeding the average by as much as three cents. The average price of diesel fuel crept up four cents, which is four cents higher than it was a year ago.
The price of oil is steadily rising for a variety of reasons, including the sanctioning of oil from Venezuela, which in turn is causing fuel prices to rise, Hannah Breul, EIA’s lead petroleum analyst, told the Washington Examiner.
The agency’s weekly oil analysis also shows that Canadian oil imports reached a new record high for refineries on the Gulf Coast, which are most impacted by the sanctions. Gulf Coast refineries supply a huge amount of the nation’s gasoline supply, from Louisiana to New York City, and have been optimized to use the heavier grade of crude oil from the South American OPEC member.
The Gulf refineries have been increasing their use of Canadian oil gradually in recent years, but with the Venezuela sanctions, “that’s been ticking up,” said Breul. Canada’s oil is similar to the Venezuelan oil grade the refiners are used to.
EIA’s analysis says the sanctions will eliminate all U.S. imports from Venezuela as the full effects of the restrictions kick in. U.S. imports of Venezuelan crude oil have been on the wane even before the sanctions were imposed due to the political instability there. Refineries have been transitioning away from it for years.
EIA maintains that the sanctions will not significantly impact U.S. fuel production. Yet, the overall global trend is toward higher oil prices, which will impact fuel prices, according to Breul.
This fact has grabbed the administration’s attention, with President Trump taking to Twitter on Monday to prod OPEC not to raise oil prices.
“Oil prices getting too high. OPEC, please relax and take it easy,” Trump tweeted. “World cannot take a price hike — fragile!”
OPEC aims to cut production in order to balance the oil market, which has been oversupplied, with the result being higher global oil prices.
Saudi oil minister Khalid al-Falih responded to Trump, “We are taking it easy.”
He said the oil cartel is “taking a very slow and measured approach” that is “interested in market stability first and foremost.”
Energy Secretary Rick Perry said Thursday that the “most important role” in the supply of oil globally is now the U.S. He suggested that the U.S. now being the largest oil and natural gas producer has given it the ability to meet oil supply shortfalls from other countries like Iran and Venezuela that in the past may have resulted in higher prices.
Perry said that Trump is always concerned about fuel prices.
