How do U.S. midterm elections shake up global commodity trading?

Meanwhile, the administration will also adjust the pace of domestic oil and gas extraction approvals to secure votes from energy-producing states. The White House is currently pushing for large-scale releases from the Strategic Petroleum Reserve (SPR). Many market analysts believe more aggressive measures—such as restricting refined product exports—cannot be ruled out in the future. However, such measures have obvious drawbacks: SPR inventories are finite and can only provide temporary relief, incapable of countering external shocks on the scale of geopolitical conflicts or global production capacity. Currently, the diesel crack spread—the premium of diesel over crude oil—has surged past $100 per barrel, hitting an intraday record high of $102.2; the previous record was $89, set in October 2022 just before winter amid the Russia-Ukraine conflict. This figure signals that supply shocks have deeply propagated from the crude oil segment into the refined products sector. Interestingly, markets price in expectations surrounding the midterm elections well in advance. Traders proactively model various possible outcomes—including control of Congress by either party. Citi’s strategy team notes that the current political configuration—Republican control of both the White House and both chambers of Congress—is what market participants refer to as the 'trifecta.' Prediction platform Polymarket’s odds show a 48% probability that Democrats win control of both the Senate and the House; a further 38% probability reflects expectations that Democrats take the House while Republicans retain the Senate. If a divided Congress emerges post-election, markets would anticipate a contraction in fiscal expansion, leading to lower U.S. Treasury yields and higher bond prices. In equity markets, cyclical and technology stocks—and certain industrial sectors—could benefit; meanwhile, defensive healthcare and consumer staples stocks may underperform. The two parties hold starkly divergent positions on fossil fuels, clean energy subsidies, critical mineral supply chains, and tariffs—meaning the election outcome will shape trade rules for years to come. Copper, aluminum, and gold will all experience trading-level volatility in anticipation. Citi also notes that volatility typically begins intensifying around 50 trading days before Election Day, with a potential rebound rally emerging within the final 30 days. Gold is a classic example: rising electoral uncertainty triggers safe-haven buying, lifting prices; once results are finalized and uncertainty dissipates, the safe-haven premium fades. Of course, it must be acknowledged objectively that commodity prices are not solely determined by U.S. elections. Oil-producing nations’ output capacity, regional conflicts, and the broader health of the global economy are all external factors independent of U.S. domestic politics. Geopolitical risks warrant particular attention. Many market analysts highlight one plausible scenario: Iran may deliberately disrupt energy supply chains to push up oil prices—and thereby influence the U.S. electoral landscape. Potential targets include key Gulf oil export infrastructure and associated shipping fleets, collectively handling roughly 5.5 million barrels per day of crude oil. From a transmission perspective, oil price increases typically feed through to U.S. retail gasoline prices within 2–4 weeks, further driving up CPI—a form of geopolitical-economic maneuvering centered on the electoral cycle. In reality, it is common to see external supply shocks drive inflation, yet U.S. political parties rarely offer a complete, transparent account of cause and effect—instead using commodity price movements as political ammunition. The ruling party tends to emphasize external geopolitical risks, while the opposition points fingers at domestic policy failures. Market dynamics thus become tools in partisan political warfare.

U.S. diesel crack spread surges past $106 per barrel, setting a new record—Trump faces 'midterm election shock'

On September 1, the U.S. diesel refining margin (i.e., the diesel crack spread) surged past $106 per barrel, setting a new historical record. At the same time, retail diesel prices approached $5.63 per gallon. This energy crisis—sparked by the Iran war—is spreading across the entire U.S. economy, centered on diesel: fueling inflation, depressing bond prices, dragging down equities, and, with less than two months remaining before the midterm elections, imposing mounting political pressure on the Trump administration. Soaring diesel prices directly hit agriculture, trucking, and winter heating demand—politically threatening the Republican Party’s core voter base in red states. On September 1, Trump urgently convened a White House meeting with major U.S. refiners—including Marathon Petroleum, Phillips 66, Chevron, Delek US Holdings, PBF Energy, and Valero Energy. According to sources cited by the Financial Times (UK), the meeting focused on expanding refining capacity and lowering fuel prices. Following the meeting, Trump posted on Truth Social, pledging environmental waivers for small refineries and urging companies to ramp up output. Goldman Sachs promptly raised its 2027 forecast for the U.S. diesel crack spread from $27 to $63 per barrel; its forecast for European refiners rose from $19 to $49 per barrel. As reported by Bloomberg, Goldman Sachs analysts wrote in their research note: 'Sustained damage to Middle Eastern and Russian refineries has further squeezed an already tight global refining capacity, pushing refined product margins to successive new highs.' The U.S. diesel crack spread—the price differential between diesel and other refined products versus crude oil—has breached $106 per barrel. Triple supply shock: diesel at the epicenter of the crisis The surge in diesel prices stems from three simultaneous supply-chain disruptions: First, the Iran war has effectively sealed off the Strait of Hormuz. Since late February—when the U.S. and Israel launched their first strikes against Iran—Persian Gulf refined product exports have fallen to roughly 40% of pre-war levels, while crude exports stand at only 70–80% of prior volumes. According to Bloomberg, the U.S. carried out another large-scale air strike against Iran on September 1; Iran’s Islamic Revolutionary Guard Corps immediately warned of 'severe retaliation.' Second, Russian refining capacity has clearly declined amid the ongoing Russia-Ukraine conflict. Third, Middle Eastern refineries have sustained physical damage. According to Goldman Sachs data, global refinery shutdowns currently exceed seasonal averages by 60%; the International Energy Agency estimates Iranian attacks have taken nearly 3 million barrels per day of refining capacity offline. According to data from the American Petroleum Institute (API), overall global crude processing volumes have declined by approximately 5 million barrels per day compared to one year ago. Diesel sits squarely at the center of this price surge: since February, global refined product wholesale prices have risen by $40 per barrel on average—with diesel accounting for over 40% of that increase. U.S. refiners are operating at full capacity—but nearing their limits Faced with the supply shortfall, U.S. refiners are running at historically unprecedented intensity. Per data from the U.S. Energy Information Administration (EIA), for the week ending August 21, U.S. refinery utilization rates had remained at 95% or higher for 12 consecutive weeks—the longest such streak since 2000. Last week, utilization climbed further to 97.4%. The API reports that U.S. diesel production in July reached a record high for that month.

US to Tap Heating Oil Reserve as Prices Soar Before Election

Oct 21, 2026

The Trump administration plans to release 315,000 barrels from the Northeast Home Heating Oil Reserve to address soaring diesel prices ahead of elections. Energy Secretary Chris Wright termed it a temporary measure against supply disruptions amid geopolitical tensions.

bloomberg

2026-05-06

US Considers Tapping Oil Under Military Bases to Refill Reserve

2026-06-05

US Energy Secretary Says Lower Gas Prices Require Iran Resolution

2026-06-09

US Energy Chief Says Oil Exports Through Strait of Hormuz Will Continue to Rise

2026-06-10

US Energy Chief Says Not Aware of US Taking Oil Out of Iran

2026-06-12

Trump’s Energy Chief Says Half of Hormuz Stoppages Are Restored