Pressed on stubborn living costs, Scott Bessent pointed to two fronts squeezing energy. He said, "We are going through an energy shock right now, due to both the war in Ukraine, because Ukraine has decided that they want to blow up Russian energy assets and refined products - so that is creating upward price pressure on a global basis - and then the conflict in Iran." He has also argued pipelines will ultimately let producers sidestep Hormuz, saying it will fade into irrelevance as alternate routes get built.
Over the past six months, conflict-related slowdowns in traffic through the Strait of Hormuz have fueled a broad climb in energy costs, pushing crude close to $100 a barrel and adding to worldwide inflation. Renewed clashes this week nudged oil higher again. Since Russia's full-scale invasion in 2022, Ukraine has faced difficulties holding its ground, and attacks it has carried out on Russian energy facilities have dented the revenues funding the Kremlin's war, leading Moscow to trim expenses and shift outlays.
Moscow has extended its diesel export ban through the end of the month. Pair that with fewer fuel cargoes moving through Hormuz than crude, and supplies have tightened worldwide. U.S. diesel exports have jumped to record levels to help fill the gap, but the flip side is thinner stockpiles at home.
Heading into winter, East Coast diesel stockpiles have fallen to an all-time low. Meanwhile, U.S. pump prices for gasoline remain above $4 a gallon - a record level for this season - and retail diesel is edging toward all-time highs.
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Bessent's comments fit with an administration signaling it is willing to press Kyiv and engage Moscow while exploring a diplomatic end to the war. He met Russian Finance Minister Anton Siluanov in Asheville, North Carolina, even as European officials avoided meetings with Russia's envoy. And in late July, Vice President JD Vance discussed the global market fallout from Ukraine's strikes with President Volodymyr Zelenskyy.
For your wallet, the bottom line is simple: geopolitics are tightening fuel supplies into peak seasonal demand. That pressure can show up in heating bills, shipping costs, and anything moved by truck, which covers a big chunk of everyday life.