US lends about a third of its heating oil reserve as Trump’s Russian diesel plan falters and fuel supplies hit a 20-year low

The US will loan about a third of its heating oil reserve in a bid to tame prices^1,2. The move responds to disruption across the Middle East caused by the Iran war¹. “These actions will help address supply chain disruptions,” the announcement said^1,2.

At the same time, President Donald Trump’s controversial plan to import Russian diesel to the US ahead of the midterm elections appears to be unravelling³. It is faltering as US fuel supplies hit a 20-year low³.

Opposition has come from New Jersey as well. Sherrill warned the state’s ports of “harsh penalties” for unloading Russian diesel approved by Trump⁴. “New Jersey will not stand by while Donald Trump supports Vladimir Putin at the expense of Americans,” Sherrill said in a statement⁴.

Why it matters to investors

The two stories describe one problem: tight supplies of diesel and heating oil at a time when the Iran war is disrupting the Middle East^1,3. Fuel supplies at a 20-year low³ leave little buffer, and the reserve loan is an attempt to add supply directly in order to tame prices^1,2.

The measures show the administration pulling separate levers on the same problem: releasing domestic stocks¹ and seeking imports of diesel from Russia³. With the Russian plan unravelling³, more of the burden falls on the reserve, of which about a third is being lent out^1,2.

The Russian plan was also politically exposed. It was launched ahead of the midterm elections³, and it has drawn the charge from New Jersey that Trump is supporting Putin at the expense of Americans⁴.

Energy Secretary Chris Wright has defended the administration’s strategy to combat high diesel and gasoline prices⁵. His defence comes as the supply picture tightens, and as the Iran war continues to disrupt Middle East flows¹.

What to watch

The first question is whether the reserve loan brings prices down. The announcement said the actions will help address supply chain disruptions¹, but supplies remain at a 20-year low³.

The second is the fate of the Russian diesel plan. It appears to be unravelling³, and New Jersey has threatened its ports with “harsh penalties” for handling the fuel⁴.

The third is the policy defence. Wright has defended the strategy against high diesel and gasoline prices⁵, while the war that caused the disruption¹ remains unresolved.