U.S. Fuel Prices Giving Trump a Headache

On March 13, 2026, pursuant to the Defense Production Act, U.S. Energy Secretary Chris Wright issued an order directing Sable Offshore to resume operations at the Santa Ynez oil field and the Santa Ynez pipeline system, aiming to mitigate supply disruption risks arising from California state policies. The field produces approximately 50,000 barrels of oil per day—nearly 1.5 million barrels per month—thereby offsetting a comparable volume of imported oil. On March 16, Sable Offshore announced that the pipeline had been reactivated. However, this action by the Trump administration backfired. On March 23, 2026, California Attorney General Rob Bonta filed a lawsuit against the Trump administration, accusing the U.S. Department of Energy of overstepping its authority by invoking emergency powers to restart the oil pipeline—a move allegedly infringing upon California’s sovereign regulatory authority over energy and environmental matters and violating both federal and state laws. On March 18, 2026, Trump signed an executive authorization temporarily waiving the century-old Jones Act, permitting foreign-flagged vessels to transport petroleum, natural gas, and other bulk commodities between U.S. domestic ports for the next 60 days. Enacted in 1920, the Jones Act mandates that cargo transported between U.S. ports must be carried aboard vessels built in the United States, flying the U.S. flag, and owned by U.S. companies. Its original intent was to bolster the U.S. shipbuilding industry; however, this requirement severely limits the number of tankers available for domestic transport. White House Press Secretary Caroline LeVitte stated in a press release that the waiver aims to ease short-term volatility in oil markets and safeguard the energy supply chain critical to national security. It is expected to lower transportation costs for crude oil shipped from the Gulf of Mexico to refiners on the East Coast, thereby alleviating price pressures in the Northeast’s refined products market. According to White House officials, the waiver applies to coal, crude oil, refined petroleum products, natural gas, natural gas liquids, fertilizers, goods primarily manufactured from refined fuels, and other energy derivatives. To alleviate persistently high domestic gasoline prices since the outbreak of war, the U.S. Environmental Protection Agency (EPA) announced an emergency fuel waiver on March 25, 2026, relaxing seasonal restrictions on E15 ethanol gasoline sales, enabling broader distribution of this fuel blend. E15 gasoline—containing 15% ethanol—is typically priced 20–40 cents per gallon lower than conventional gasoline. Ordinarily, to prevent summer ozone pollution, E15 sales are banned across most of the U.S. during summer months, with only E10 gasoline permitted. On May 13, 2026, the U.S. House of Representatives passed the National Consumer (883434) and Fuel Retailer Choice Act by a vote of 218–203, eliminating the seasonal ban imposed due to smog concerns and authorizing nationwide year-round E15 sales. (III) Proposals to suspend fuel taxes and halt U.S. petroleum exports have gained little traction or substantive progress. In response to soaring international oil prices triggered by the war, petroleum-importing countries including Australia and Vietnam began announcing suspensions of fuel, environmental, and import taxes starting in March 2026 to ease consumer burdens. On May 10, 2026, Energy Secretary Wright stated in a televised interview that the Trump administration was seriously considering the possibility of suspending the federal fuel tax.

Global Feed Grain Market Weekly Outlook: Mexico Aggressively Purchases U.S. Corn; Export Target May Be Revised Upward

This week, international crude oil futures declined, as U.S. output reached record highs both for the current week and for August. However, Iran is preparing retaliatory strikes against Israel in the coming days. The global benchmark Brent crude closed at $73.10 per barrel—down approximately 3.9% from the previous week. The ICE U.S. Dollar Index closed at 104.203, up 0.07% week-on-week. Strong U.S. Corn Exports Driven Primarily by Mexican Demand According to the USDA’s weekly export sales report, net U.S. corn sales for the week ending October 24 totaled 2.34 million metric tons—35% lower than the prior week but 7% above the four-week average. Cumulative U.S. corn sales for the current marketing year stand at 25.82 million metric tons, up 41.3% year-on-year, largely attributable to robust Mexican procurement. The USDA forecasts total U.S. corn exports for the year at 59.06 million metric tons, an increase of 1.4% year-on-year—suggesting the USDA may well raise its U.S. corn export forecast again next Friday. Daily private export sales reports were frequent over the past week. On Monday, private reports indicated sales of 124,000 metric tons to Japan and 120,000 metric tons to unknown destinations; on Wednesday, a report showed sales of 273,048 metric tons to unknown destinations; and on Friday, a report confirmed sales of 781,322 metric tons to Mexico—of which 715,800 metric tons are scheduled for delivery in the 2024/25 marketing year, and the remaining 65,532 metric tons in 2025/26. From a pricing perspective, U.S. corn remains competitive. As of October 31, U.S. Gulf corn FOB prices stood at $209 per metric ton—down $6 from the prior week. Paranaguá port (Brazil) corn was quoted at $216, down $3; Argentine corn on the Upper River was quoted at $208, down $6; and Ukrainian corn FOB prices on November 1 stood at $200 per metric ton—down $1. California to Allow Higher-Ethanol Gasoline Sales, Bolstering Corn Demand Outlook An additional supportive factor for corn futures this week was California Governor Gavin Newsom’s letter to the California Air Resources Board (CARB), urging approval for statewide E15 (gasoline blended with 15% ethanol) sales. Currently, California is the only U.S. state prohibiting E15 sales—its gas stations are restricted to selling only E10. If California permits higher-ethanol blends, demand for corn as ethanol feedstock in the U.S. would likely rise. A USDA Friday monthly report showed that total U.S. corn consumption in September 2024 amounted to 490 million bushels—8% lower than August but 3% higher year-on-year. Of this, corn used for fuel ethanol production totaled 440 million bushels—down 8% month-on-month but up 3% year-on-year. September marks the first month of the U.S. corn marketing year. In its October supply-and-demand report, the USDA projected corn usage by the U.S. ethanol industry for the 2024/25 marketing year at 5.45 billion bushels—down 0.4% year-on-year.

California Authorizes Higher-Ethanol Fuel Sales to Lower Gasoline Prices

1 day ago

California Governor Gavin Newsom signed legislation permitting immediate sales of E15 ethanol-blended fuel to curb record-high gasoline prices. The measure is projected to increase annual ethanol demand by 650 million gallons and save drivers approximately $2.7 billion yearly.

reuters

2026-09-21

California Authorizes Higher-Ethanol Fuel Sales to Lower Gasoline Prices

California Authorizes Higher-Ethanol Fuel Sales to Lower Gasoline Prices

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