The war in Iran has pushed fuel prices to record highs, and the head of the second-largest oil company in the United States stated that there are not many ways left in the world to easily absorb these shocks.

Chevron's CEO Mike Wirth on October 7th at CNBC Squawk Box Europe The program said, "Those buffer measures in the system gave us time, but they have now been exhausted." He stated, "As a result, our current inventory levels are much lower, which makes the system more vulnerable to disruptions."

Wirth said that there was an ample supply in the global market at the beginning of 2026. "We entered this year with high inventories," he said, referring to both the commercial inventories held by companies and the strategic reserves held by governments around the world. Since the war began in late February, these buffers have been gradually depleted: companies have reduced their commercial inventories, governments have released emergency stocks, and sanctioned crude oil has also been allowed to flow to buyers.

He described this as "a very serious situation."

Wirth states that releasing inventory is merely a temporary measure. They are "buying time," he says, but the fundamental issue is "the restricted flow from some of the world's largest oil-producing regions."

Diesel relief is not coming any time soon.

The most noticeable increase in prices is for diesel fuel, which powers trucks, trains, and agricultural machinery. On September 22, the average price of diesel in the United States reached a record high of $6.53 per gallon, AAA. According to CBS News, this price is higher than the approximately $3.76 per gallon that prevailed before the war between the United States and Israel in late February. In California, the average price across the state has surpassed $8 per gallon.

Don't expect this situation to change quickly. The International Energy Agency ( IEA ) stated in its October "Oil Market Report" released on Wednesday that the diesel market will remain tight until 2027, and it will depend on the recovery of fuel supply in the Middle East. The benchmark diesel price has fallen from a record of over $200 per barrel in September, but it is still almost twice the price of crude oil and the level before the crisis. IEA also indicated that it is unlikely that depleted diesel inventories will return to levels beyond normal seasonal fluctuations before the second half of 2027.

The institution expects that global oil supply will decline by an average of 5.8 million barrels per day this year to 100.7 million barrels per day, before rebounding in 2027, and believes that the market will remain in a state of supply falling short of demand until the end of the year. IEA also predicts that high oil prices will reduce global oil demand by 2.6 million barrels per day in 2026, with diesel accounting for about a quarter of that reduction.

Trump is looking for ways to supply everywhere.

With less than three weeks until the midterms on November 3rd, fuel costs have become a political burden for the White House. According to a AP-NORC poll released on October 1st, reported by Fortune, Americans do not approve of the way the president is handling the Iran war and attribute the higher prices to him.

Trump has tried various measures. In late September, he proposed a ban on diesel exports from the United States. On September 27, during an interview with a Fox News journalist, he said, "We are considering this matter very seriously." At the same time, he also acknowledged that this could lead to higher gasoline prices. Refiners warned that such a policy could backfire, arguing that it might force factories to cut production and ultimately tighten domestic supply. Wirth called this idea "unwise," telling CNBC, "An export ban, whether in the United States or other countries, would actually take supply off the global market and could possibly make the situation worse."

After the G7 agreed to release 100 million barrels of crude oil and diesel from emergency reserves over a period of four months, with a concentrated release of diesel in the first 20 days, Trump abandoned this idea on October 2nd. Prior to that, his government had exerted pressure on Europe. "We will not impose an export ban," Trump told reporters on that day.

Three days later, he signed an executive order allowing truck drivers and farmers to use red-dyed diesel fuel, normally restricted to off-highway equipment and exempt from highway fuel taxes, on public roads. The order merely deferred, rather than eliminated, the 24.4-cent-per-gallon federal excise tax until December 31, without interest or penalties, and directed the Treasury Department to investigate how to completely eliminate the tax. Analysts are skeptical: BJW_KEEP_00001 told BJW_KEEP_00003 that the exemption “would not increase supply globally.”

There aren't many tools left.

The latest move by Trump occurred on October 9th: he announced that Russian President Vladimir Putin had agreed to supply over 4 million tons of diesel to the global market in phases. Meanwhile, the U.S. Treasury Department issued a general license exempting sanctions on Russian diesel, which is valid until April 7, 2027.

This agreement has drawn criticism from both parties in Congress and has also been strongly condemned by Ukraine's President Volodymyr Zelensky. He wrote on X: "Allowing Russia to sell oil products is an investment in a war that must end, not be prolonged."

However, this arrangement may not bring much relief either. Ukrainian drone attacks on Russian refineries have severely impacted the country's fuel production: in September, Russia's exports of diesel and gasoil dropped to about 144,000 barrels per day, hitting a ten-year low. Some analysts doubt whether Moscow will be able to fulfill the supply levels it announced in Trump. In its latest report, IEA stated that relaxing export restrictions on Russia is unlikely to substantially change the global diesel balance, as the bottleneck lies in the insufficient operational refining capacity.

This brings us back to the warning from Wirth. Releasing inventory, exempting from sanctions, and providing tax reductions can all buy some time, but they cannot replace the crude oil and fuel that is not flowing out of the Middle East. As these buffers have been almost completely exhausted, there is hardly anything left to cushion the next impact.