Two decisions by Donald Trump, the President of the United States, this week will determine energy risk, and in both cases, he is willing to forgo his power to lower pump prices before November 3.
No Intervention in the Saudi War
Trump's first decision is the lack of U.S. military intervention in the Saudi war with the Houthis. The Houthis attacked the Aramco headquarters in Dhahran on Tuesday night and kept Riyadh's main airport closed until Saturday. Since September, Washington has stated that it will refrain from intervening as long as the Houthis only target Saudi sites.
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Russian Diesel Import License Test
The second decision is the license for importing Russian diesel, which will face its first test on October 18. This test, under the Russia sanctions law that Trump signed a month ago, will lead to tariffs of up to 500% on Russian oil products. In this situation, the Houthis can disrupt any agreement in the Gulf by using a missile against Saudi targets.
Currently, the Houthis have demonstrated their ability to disrupt the oil market by threatening further attacks on Saudi airports and oil facilities. The Saudis cannot stop all attacks, and the Houthis are targeting their objectives over an area of 2.15 million square kilometers using drones, cruise missiles, and ballistic missiles.
Washington is unlikely to take action before November 3. More than 200 U.S. intelligence and military personnel are assisting Saudi commanders, but Trump has not decided to send military jets. Instead, Saudi Arabia continues the fight with its air force and with the help of Pakistani jets and communication channels in Oman to contact the Houthis.
It is expected that with this situation continuing, oil prices will remain high with a Saudi premium. At the same time, Trump has granted Moscow a license for diesel imports, which helps ease pressure on the oil market. However, this measure will only suffice for less than five days of U.S. diesel consumption, totaling only about 13.5 million barrels.
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