Are We Winning Yet?

The year was 1979. I was News Director of a small TV station in Houston, the Arab oil embargo had been going on for a few years and the Iranian Revolution had recently threatened to turn off the oil spigot entirely. So, my morning routine for a while involved this.

Get up around 5AM, jump into some jeans, climb into my nifty 1974 MGB, go to the nearest 7-11 for a big cup of black coffee and a paper and then to the nearest gas station to park in line, with seemingly half the city in line with me, until they opened. And the next day, repeat the procedure for my wife's car.

And that was on the even or odd number days according to the last number on your license plate.

Gas prices had nearly doubled from around 63 cents a gallon to almost $1.20. And that sounds great right now until you realize it's the equivalent of $5.55 today. So, I have lost my tolerance for whining about prices now. But, I think I'll whine a bit anyway.

I'll start with the President's latest whining, because it's a day that ends with the word "day" so, of course, he did. Here is his latest eloquence on that social media shipwreck he calls "Truth Social."

“What’s driving up Gasoline is no longer the Strait of Hormuz, because Record Numbers of Barrels are coming out now on an almost daily basis, but the word, ‘Refineries,’ where Russia’s are being blown up by Ukraine, and where ours are being closed up, in Blue States, like California, by the Dumocrats.”

By the way, did you know the word "dumb" normally has a "B" at the end? Just checking.

OK, so here we go. At one point, before the advent of so called "fracking" procedures for oil extraction, we thought the world might be on the verge of what was called "Peak Oil." I did a story about it several years ago, and back then, the mood was pessimistic...

Are we at "Peak Oil?"

But with Fracking and the development of so-called "tar sands oil" from Canada, supply isn't such a worry. Oh, wait. Did I say "Canada?" Never mind.

But world events and climate concerns do play a role in the fluctuating supply of oil and gasoline. Let's start with Iran.

This war of choice, and make no mistake, it is that since no intelligence service, including ours, thought Iran was near to making a nuke, led to the closure of the Strait of Hormuz, a choke point through which nearly a 5th of the world's oil travels by tanker. It has gone from completely closed to relatively open with some caveats, as the President says. Oil supplies are back to more than a trickle now, though not record-setting as Trump claims.

That is due to US naval escorts providing protection, which is costly, and very high insurance costs. Consequently, the oil itself is expensive as well. Before the war, oil flowed freely and without US protection or outrageous insurance. But prices are a bit lower this week.

An old friend, energy analyst for Gasbuddy, Patrick Dehaan said this today...

“Average gasoline prices fell in 48 states over the last week, with diesel declining in 48 states as well, as a broad-based retreat brought relief to motorists across much of the country.” 

But if Trump renews the war, and we block Canadian oil imports, which makes zero sense, they could well be heading up again.

OK, then it's all Ukraine's fault, right? Russia refines a lot of diesel for much of the world, though not for us due to sanctions. It's a major source of income for them. But Ukraine, as Trump says, has been pretty successfully bombing their refineries.

Which only makes sense since they were invaded by Russia and have been fighting for their lives ever since. I'm not sure why the President found it necessary to blame them for prices, since they are hitting economic targets, unlike Russia, which is hitting churches, apartments, and shopping centers.

Damn it, Zelenskyy! Have you seen the price of diesel?

Despite the fact that Trump cut off our supplies of arms, Ukraine has been doing an incredible job against Putin's boys. But now with the midterms coming, we're blaming them for prices?

Whack my knee with a bat and curse me for limping.

So, despite the fact that Putin and Xi both have pictures with the President hanging in the White House, they are both supplying Iran with intelligence and drone parts to kill US forces. But our price situation is, oh yeah, Ukraine's fault?

OK, we blame Zelenskyy, but he has an accomplice. Let's call out blue state governors, and by that we mean Gavin Newsom. They and wacky environmentalists are closing refineries to make things harder.

Two California refineries did recently shut down, including Phillips 66's Los Angeles Refinery in October 2025 and Valero's Benicia refinery in April 2026. But those two pale in capacity to the closure of the LyondellBasell refinery outside Houston, mainly because they could not find a buyer for the plant. The other big one was Phillips 66 in Louisiana. Both of those are much bigger facilities and, of course, are in red states, but they aren't apparently the problem.

There are four others that "closed" in the last year, but they didn't actually close. They were converted to refine renewable fuels. But here's the deal: everyone else has pretty much taken up the slack. Oil companies don't like excess refinery capacity. It costs a lot of money and brings in none.

My dad was an electrical engineer at the Ethyl Corporation plant outside Houston, and I know the area well. They make the additives that make premium gas premium. Heck, that business put food on our table and my siblings and me through college. But that business has changed.

Capacity did not only leave the country — it was also added. The single largest addition was ExxonMobil’s Beaumont, Texas expansion, which brought roughly 240,000 barrels per day online in 2023; incremental de-bottlenecking at surviving refineries added the rest. 

2020 was the peak of refinery capacity before Covid cratered the market and we all stopped driving. That peak was 18,976,085 barrels a day. This year the average is 18,160,493 a day. We are not that far below the peak, and have plenty of refinery products. In other words, America did not simply shrink its refining system.  America concentrated it.

But, take Russia out of the mix worldwide, and in terms of diesel, we do need more. Yes, that absence is due to Ukrainian drones, but perhaps Putin should have taken that into account before invading a sovereign country. Again, blaming Ukraine for fighting back is completely backwards.

The President should go after the real villain here, you know, the guy he shook hands with in Alaska months ago.

Then grab a mirror and ask it why Hormuz was closed and Canada wants nothing to do with us.

The answer is looking back at you.