• White House economic adviser Kevin Hassett says 'real relief on gas prices is coming virtually immediately,' citing refineries turning back on.
  • However, a Dallas Fed analysis warns that damaged refineries and depleted inventories could keep fuel prices elevated even after crude flows normalize.
  • Energy Secretary Chris Wright notes diesel prices have already fallen 20–25 cents from their peak but predicts only gradual declines ahead.

Relief on the Horizon?

White House National Economic Council Director Kevin Hassett on Friday said U.S. refineries are coming back online and that consumers should expect relief at the pump soon. In an October 2 Fox News (FOXA) interview, Hassett declared that “real relief on gas prices is coming virtually immediately.” His comments echo the administration’s broader messaging that supply chains are healing after months of disruption.

Energy Secretary Chris Wright added on October 6 that diesel prices have already fallen by roughly 20–25 cents from their recent peak, and he predicted further gradual declines over the coming weeks. “Truckers could begin seeing relief by Saturday, October 10,” Wright said, referencing an executive order signed by President Trump on October 5 that temporarily expands highway access to red-dyed diesel and provides penalty relief through December 31.

Yet the latest evidence suggests that a broad, durable decline in fuel prices is not guaranteed. An October 8 analysis by Dallas Fed economists warns that damaged refineries, depleted inventories and shipping constraints could keep gasoline, diesel and jet-fuel prices unusually high even after crude-oil flows normalize.

The Refinery Restart Puzzle

Hassett’s headline signals optimism, but it does not specify which refineries are restarting. That distinction matters: restarting temporarily idled facilities is different from repairing war-damaged plants or reopening permanently closed refineries.

The Dallas Fed estimates that global refining capacity has been curtailed by approximately 6–8 million barrels per day since late spring—up to 10% of global refining. The authors expect elevated fuel-processing margins to persist even after Strait of Hormuz shipping normalizes.

“The immediate problem is not solely oil availability; it is the ability to manufacture and deliver the specific fuels consumers need,” the Dallas Fed economists wrote. They attribute unusually large crack spreads—the difference between crude prices and wholesale refined-product prices—to supply constraints rather than retailer markups.

That creates three consequences: inflation can remain elevated even when crude prices soften; U.S. buyers remain exposed to international shortages, particularly as European demand for U.S. diesel exports has increased; and low inventories make regional markets more vulnerable to outages.

Industry Backdrop

Between 2019 and 2025, global liquid-fuel consumption increased by 4 million barrels per day, while refining capacity grew by only 2.3 million, according to the Dallas Fed. China and the Middle East added 4.4 million barrels per day of capacity, while Europe and North America shed 2.1 million. The authors associate Western closures with thin margins, aging facilities and regulatory costs.

Major U.S. refiners—Valero (VLO), Marathon Petroleum (MPC), Phillips 66 (PSX) and Exxon Mobil (XOM)—posted record or near-record second-quarter earnings, supported by benchmark refining margins averaging more than $50 per barrel since the war began, more than twice their ten-year average, according to Reuters (TRI) columnist Ron Bousso. Those figures describe the earlier earnings backdrop, not current October margins.

The relationship is important: fuel shortages can raise refiners’ profits while increasing consumers’ costs. Restored competing supply could therefore help fuel buyers while reducing exceptional refining margins.

The administration has also explored reopening shuttered refineries, including the St. Croix facility in the U.S. Virgin Islands. That initiative concerns restoring closed capacity and should not be conflated with the unspecified operational restarts in Hassett’s headline.

The Dallas Fed identifies several overlapping pressures: the Iran conflict and Hormuz disruption, damage to Middle Eastern refineries, Ukrainian attacks on Russian refining infrastructure, Russian and Chinese export restrictions, and Red Sea shipping risks. Consequently, domestic U.S. policy alone cannot restore the entire global fuel supply chain.

What to Watch

The key evidence to watch is sustained refinery throughput, replenishment of gasoline and diesel inventories, and narrowing crack spreads—not restart announcements alone. Those indicators would show whether operational recovery is translating into lasting consumer relief.

Wright expects gradual diesel-price declines, but the Dallas Fed analysis suggests that recovery may be uneven across fuels and regions because inventories are low and some capacity remains damaged. Dallas Fed economists expect higher crack spreads to linger if Russian outages persist and Middle Eastern facilities take months to recover.

Reuters’s analysis adds that U.S. refiners’ deferred maintenance could introduce new outages just as international markets depend heavily on their output. These are conditional expert assessments, not certain outcomes.

Internationally, Italy scheduled an October 8 meeting with refiners to discuss increasing domestic fuel production amid global supply disruptions. Reuters also reported debate over a possible windfall levy, illustrating the tension between encouraging supply and addressing exceptional profits. And Reuters’s late-September coverage reported a partial restart of Shell (SHEL)’s Pearl gas-to-liquids plant in Qatar for production-facility testing—a concrete recovery development, but not evidence that all affected facilities have restarted.

For now, Hassett’s promise of imminent relief remains just that—a promise. The gap between political optimism and operational reality may determine how quickly drivers actually see savings at the pump.

Correction: An earlier version of this article misstated the date of Kevin Hassett’s Fox News interview. It was October 2, not October 1.