President Donald Trump’s boast that allies agreed to a “massive” fuel release falls apart on close inspection, according to an economist.
Justin Wolfers, an economist at the University of Michigan, argued in an article for his Platypus Economics newsletter on Tuesday that the 100 million barrels of oil and fuel the Group of Seven pledged last week are largely what’s left over from an emergency release promised in March.
Trump posted on Truth Social on Friday that Europe had agreed to release a “massive amount” of diesel right away, casting it as a concession won in exchange for dropping his threat to ban U.S. diesel exports.
But Wolfers wrote that “almost nothing new has happened,” with the G7 agreeing to do what it had already promised.
Wolfers noted that International Energy Agency members agreed in March to tap their emergency reserves for roughly 400 million barrels after the U.S. attack on Iran made shipping through the Strait of Hormuz dangerous. By his reading, about 100 million barrels of that pledge remain undelivered, and the G7’s new communique simply commits the G7 to finishing the job within four months.
“This is an agreement to agree that they agree about the earlier agreement,” Wolfers wrote.
He also flagged that the Energy Department offered oil companies up to 40 million barrels from the U.S. reserve on September 29 as part of America’s share of the March pledge, raising the possibility that a big chunk of what Trump credited to Europe is American oil already owed. Wolfers said there’s no way to know for sure because neither the G7 nor the IEA has disclosed which countries owe what.
Taken at face value, Wolfers argued, the release is still tiny next to the shortfall. The package works out to about 0.8 million barrels a day, while traffic through the strait was down about 12 million barrels a day from prewar levels as of August.
“The daily gap is 15 times larger than the fix,” Wolfers noted.
The communique promises a “front-loaded substantial diesel release” within 20 days but offers no figures, no country breakdown and no way to enforce it. Wolfers pointed out that the window closes October 22, less than two weeks before the midterms.
Traders weren’t buying Trump’s brag either, Wolfers noted. Diesel futures dropped after Trump’s post but climbed back to about $4.55 a gallon wholesale within hours once the actual communique came out, according to Wolfers.
“It isn’t new, it isn’t large, and it isn’t enforceable,” he wrote. “It’s the appearance of doing something without the thing actually getting done.”
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