Donald Trump has been one of the strongest political supporters of the American oil and gas industry. Yet just weeks before the November 3 midterm elections, US motorists are paying unusually high gasoline and diesel prices.
That creates an obvious political risk. Voters rarely distinguish between crude prices, refinery margins, geopolitics and government policy when they fill their tanks. They simply see the price on the pump.
With gasoline around $4.37 per gallon and diesel above $6, persistent high fuel prices could become a major source of voter frustration before the midterms.
For the oil industry, this raises a strategic question: is maximizing short-term margins worth damaging the political environment that has strongly favored domestic oil and gas production?
The industry may eventually discover that protecting margins for a few months was far less valuable than protecting the long-term political conditions under which it operates.
I would recommend pushing US oil prices down as much as possible over the next four weeks.