Saudi Arabia Becomes the Oil Market’s Biggest Wild Card

As Saudi Arabia grapples with escalating threats to its oil infrastructure and Gulf shipping routes, Brent crude hovered near $105 per barrel. The Trump administration's Russia diesel deal has failed to bring about significant reductions in US fuel prices, resulting in a 3-4% decline in heating oil futures and raising the specter of a midterm election fiasco for the White House.

While fuel prices have not recovered to October 2022 levels in inflation-adjusted terms, the perception of the fuel crisis by the American public as a consequence of Trump's Iran war is a significant electoral liability. Beyond fuel prices, Trump's fervent support for data center construction could become a campaign detriment, as US power prices have reached their highest level in real terms since the mid-1990s.

In Michigan and Texas, both states with crucial Senate and House races, gasoline and diesel prices have surged by 40% and 67%, respectively, while cumulative inflation has increased by 5.4%. Market movers include Shell's acquisition of a 30% stake in Equinor's Bay du Nord project, Chevron's offshore exploration deal in Egypt, Motor Oil Hellas' fatal incident in Greece, ENI's divestiture in Indonesia, TotalEnergies' expansion of its renewables portfolio, the US Energy Department's emergency crude release following Hurricane Isaias, and the Saudi royal family's withdrawal from the World Petroleum Congress due to Houthi attacks.