(Oil & Gas 360) By Greg Barnett, MBA – Obama Understood the Politics. Biden Worsened It With Failed Energy Policies. Faced it in 2022. Trump Confronts it in 2026.Gasoline prices may be one of the few economic statistics Americans can recite without opening an app, reading an analyst report, or waiting for a government release. The number is posted in six-foot numerals on street corners across the country.That visibility makes gasoline different. It is simultaneously a commodity, a household expense, an inflation signal and a political billboard.Former FedEx Chairman and CEO Fred Smith once recalled a private observation from President Barack Obama. Smith said Obama told a small group that people attributed changes in his polling to many different issues, but Obama believed his numbers were “almost perfectly correlated with the price of gasoline.” Whether the relationship was literally perfect is beside the point. Obama understood the political sensitivity of the pump.Joe Biden confronted the same reality in 2022. After his administration pursued an energy agenda designed in part to accelerate America’s transition away from fossil fuels, gasoline prices surged amid the post-pandemic recovery, Russia’s invasion of Ukraine, refinery constraints and rapidly changing global petroleum markets. His administration responded by releasing 180 million barrels from the Strategic Petroleum Reserve, calling for a temporary federal gasoline-tax holiday and publicly pressing refiners to increase output.The Biden administration subsequently cited a Treasury economic model estimating that the U.S. SPR release, combined with releases by international partners, may have kept gasoline prices roughly $0.40 per gallon below where they otherwise would have been. But that $0.40 was not an observed decline at the pump. It was a theoretical estimate based on a counterfactual model—an estimate of a gasoline price that economists calculated might have existed had the releases never occurred. There was no observable alternative market price against which the claimed savings could be measured.Economists make weathermen look like geniuses.Now Donald Trump confronts the same political physics in 2026.The parties change. The price sign does not.The Latest EIA Numbers Tell a Refining StoryThe September 4, 2026, U.S. Energy Information Administration analysis provides a particularly useful way to separate crude oil prices from refinery economics.EIA reported that the U.S. average regular gasoline price was $4.07 per gallon on the Monday before Labor Day.Americans first met $100 oil in 2008. By year’s end it was at $45 a barrel. In 2008, Americans paid an average of roughly $3.30 per gallon for regular gasoline—more than $5.00 per gallon in today’s dollars. At the July 2008 monthly peak of $4.06, the inflation-adjusted equivalent exceeded $6.20 per gallon.Regional differences were substantial: $5.21 on the West Coast, $4.27 in the Rocky Mountains, $3.94 on the East Coast, $3.85 in the Midwest and $3.62 on the Gulf Coast.But the important part of the EIA analysis is not merely the retail price. It is what happened between the crude barrel and the gasoline gallon.Since May, EIA said, the New York Harbor gasoline crack spread had averaged about $1 per gallon higher than in 2025, when that spread peaked near $0.60 per gallon. EIA’s explanation was direct: “Gasoline crack spreads are elevated primarily because of tight gasoline supplies globally.”Why tight?Refining disruptions in Russia, China and the Middle East have reduced global product supply. Those disruptions have raised the cost of imported gasoline while simultaneously increasing foreign demand for U.S.-made gasoline.Since March, EIA said total U.S. gasoline imports — finished gasoline plus blending components — were 32% below the 2021-2025 average.That matters because the East and West Coasts depend on imports to supplement local production. What also matters is how much refining capacity both coasts have lost.The East Coast refinery system has been shrinking for years. EIA data show East Coast refinery crude-oil and petroleum-product inputs averaged roughly 1.3 million barrels per day in 2008. By 2025, that figure had fallen to approximately 480,000 barrels per day—a decline of more than 60%.The West Coast is now experiencing its own significant contraction. Phillips 66 closed its 138,700-barrel-per-day Los Angeles refinery in late 2025, eliminating about 5% of West Coast refining capacity. Valero then ceased refining operations at its 145,000-barrel-per-day Benicia refinery in 2026. Together, those two California facilities represented roughly 284,000 barrels per day of refining capacity and approximately 20% of California’s capacity.Unlike the East Coast, which can receive substantial refined-product supplies from the Gulf Coast through pipelines and marine transportation, the West Coast has limited pipeline connectivity to America’s enormous Gulf Coast refining complex. EIA specifically warns that this isolation means refinery-capacity losses can have a disproportionately large effect on West Coast fuel availability and prices.The market is already responding. Phillips 66, Kinder Morgan and HF Sinclair are developing the $5 billion Western Gateway Pipeline system, designed to eventually move as much as 230,000 barrels per day of gasoline, diesel and jet fuel from Midcontinent and Gulf Coast supply points toward Arizona and California.In other words, America is preparing to spend billions of dollars transporting refined products thousands of miles to replace gasoline, diesel and jet fuel that until recently were manufactured much closer to where they were consumed.The distillate supply situation is tighter than Dick’s hatband. Since March, EIA data show the New York Harbor distillate crack spread has averaged roughly $0.74 per gallon above the gasoline crack, sending a clear signal to refiners to maximize diesel and jet fuel production whenever crude slates and refinery configurations permit. By the week ending August 28, U.S. distillate inventories stood 14% below the five-year average, compared with gasoline inventories that were 6% below average. The disparity is even more evident in the futures market, where diesel crack spreads have recently approached $108 per barrel, underscoring just how aggressively the market is pricing distillate scarcity.That is the market beneath the political argument.Americans Are Still DrivingThere is another data series that deserves to sit beside every discussion about gasoline demand: vehicle miles traveled.Americans are not parking their vehicles.Federal Highway Administration (FHWA) data show the moving 12-month total of U.S. vehicle miles traveled (VMT) reached approximately 3.338 trillion miles through July 2026. FHWA’s longer-term forecast also calls for national VMT to continue increasing, with light-duty miles growing about 0.5% annually through 2053 and truck mileage growing faster in several categories.That helps explain something that otherwise sounds contradictory. Gasoline consumption can flatten or decline modestly while Americans drive more.The vehicle fleet becomes more efficient. New internal-combustion vehicles travel farther on a gallon. Hybrids use less gasoline. Battery-electric vehicles add miles without consuming gasoline. Route optimization and fleet technology reduce fuel use per mile.So “gasoline demand is down” and “Americans are driving more” can both be true.That distinction is important because energy discussions routinely treat gallons consumed as though they were a direct proxy for mobility or economic activity. They are not.Look at the highways. Look at the FHWA numbers. Americans continue to move.And They Are Still Flying, Shipping, Farming and BuildingGasoline is only the most visible piece of the transportation-fuel complex.Diesel is embedded in the economy.It powers trucks, construction equipment, agricultural machinery and portions of rail and industrial activity. It affects the cost of moving food, building materials, manufactured goods and nearly everything that travels substantial distance before reaching a customer.Reuters reported that U.S. diesel prices reached a record $5.82 per gallon in early September, exceeding the previous 2022 peak. The U.S. diesel crack spread reached roughly $108 per barrel.That is not a subtle market signal.Russell Hardy, CEO of Vitol, and Phillips 66 executive Mark Senn warned this week that global diesel supplies could remain tight through winter. The issue is not simply whether crude oil exists somewhere in the world. Refining capacity has been disrupted, and the lost capacity was particularly important to the international distillate market.This is a distinction policymakers sometimes blur: crude oil supply and refined-product supply are related, but they are not interchangeable.A barrel of crude oil does not power a semi-truck. It first has to reach a functioning refinery, be processed into the required product specification, transported through the distribution system and delivered where the customer needs it.Listen to the People Running the RefineriesAmerica’s leading independent refiners are describing the same basic conditions from inside their plants.Marathon Petroleum Chairman, President and CEO Maryann Mannen said the company’s second-quarter performance reflected “safe and reliable operations to meet resilient consumer demand.” Marathon’s Refining & Marketing adjusted EBITDA reached approximately $6.7 billion in the quarter.Valero Chairman, CEO and President Lane Riggs said Valero’s refineries, renewable diesel plants and ethanol facilities were “helping to meet resilient demand for transportation fuels.” Valero’s refining throughput averaged approximately 3.0 million barrels per day in the second quarter, while refining operating income rose to $4.5 billion from $1.3 billion a year earlier.Phillips 66 reported refinery utilization of 96% in the second quarter. CEO Mark Lashier said the company’s operating and commercial system enabled it to “reliably supply energy products across the United States and to global consumers.” Reuters subsequently reported Lashier saying Phillips 66 expected third-quarter utilization in the mid-90% range after its refineries exceeded nominal faceplate capacity at points during the second quarter.HF Sinclair was equally explicit about the market. The company attributed improved second-quarter refining results to “steady demand, tight supply and favorable crack spreads.” Its adjusted refinery gross margin increased 57% year over year to $25.95 per produced barrel sold, while crude charge increased to about 640,000 barrels per day.CVR Energy’s SEC filing adds another useful perspective. The company said total operable U.S. refining capacity has declined on a net basis since 2020 and that damage in the Middle East plus lower Russian refinery utilization had further tightened global refining capacity.Taken together, these are difficult numbers to reconcile with a simple narrative that refiners are withholding production.They are running hard.The problem is that a refinery running at 96%, 98% or occasionally above its nominal rating cannot simply be ordered to produce another 10% indefinitely.Wall Street Sees the Same ScarcityInvestors have noticed.Reuters reported that Marathon Petroleum, Phillips 66 and Valero generated approximately $12.6 billion of combined second-quarter profit as refining margins surged. The companies also returned billions of dollars to shareholders.That profitability is politically combustible. High pump prices alongside large refining profits inevitably produce questions about gouging, market power and whether consumers are receiving a fair price.Those are legitimate questions to ask.But high margins can also be exactly what a commodity market produces when capacity is scarce.The diesel crack moving above $100 per barrel is not evidence by itself of misconduct. It is evidence that the market is placing an extraordinary premium on the ability to turn crude oil into diesel.That is why analysts and traders increasingly focus on the refinery bottleneck rather than crude supply alone. Reuters reported this week that physical oil markets remain tight even as non-OPEC production has helped replace some disrupted crude supply. Goldman Sachs and HSBC have raised oil-price expectations, while the refined-product market has shown even more dramatic scarcity signals.The refinery equity market has responded accordingly. Refiner shares have sharply outperformed as the value of existing processing capacity increased.Markets are effectively placing a higher price on something the United States spent years assuming it would always have enough of: conversion capacity.The 2022 LessonThe Biden episode deserves a factual reading because it illustrates both the power and the limitations of presidential action.In March 2022, Biden authorized a 180-million-barrel SPR release. In June, with gasoline prices imposing a highly visible burden on consumers, he asked Congress to suspend the 18.4-cent-per-gallon federal gasoline tax for 90 days and urged states to consider their own relief. He also called on refiners to increase production.Those were real interventions. Describing the administration as literally doing nothing about gasoline prices would be inaccurate.The more useful policy question is different: were those measures primarily short-term price interventions, and what did the United States do during the same period to ensure sufficient long-term refining and petroleum infrastructure?An SPR release puts crude oil into the market. It does not build a refinery.A gasoline-tax holiday, had Congress enacted it, would have changed the retail tax component. It would not have created another barrel per day of refining capacity.Pressuring refiners can matter if facilities are operating below capability. It matters considerably less when the system is already running in the mid-to-upper 90% utilization range.That distinction is relevant in 2026 because the Strategic Petroleum Reserve itself is a smaller cushion than it was before the 2022 releases. Reuters reported this week that the reserve remains at its lowest level since the early 1980s.Policy tools have consequences beyond the quarter in which they are used.Trump’s 2026 ProblemTrump now owns the gasoline-price problem politically for the same reason Obama understood it and Biden experienced it: the incumbent president occupies the White House when voters pass the price sign.The current situation is complicated by the Iran conflict and by attacks on Russian refining infrastructure. Reuters reported on September 9 that Brent crude had moved above $100 per barrel amid renewed U.S.-Iran attacks and concerns about Saudi energy infrastructure. Higher energy costs have become an obvious midterm issue.Representatives from major refiners and fuel retailers met with administration officials this month as the White House searched for ways to reduce consumer fuel costs. Participants were expected to include major refining companies such as Valero, Marathon Petroleum and PBF Energy, along with large distributors and retailers. Public reporting indicates the discussion focused on increasing refinery throughput, reducing regulatory friction and identifying near-term opportunities to expand fuel supplies rather than imposing export restrictions.The administration’s message has been consistent. White House officials described the objective as identifying “concrete, near-term steps” to expand refining capacity, increase energy production throughout the supply chain and lower costs for consumers. At the same time, the administration has supported additional Small Refinery Exemptions under the Renewable Fuel Standard and approved temporary fuel-specification waivers designed to increase gasoline availability. Industry sources indicated that exemptions covering approximately 1.2 billion to 1.8 billion RINs were under consideration, while EPA estimated its emergency fuel waiver could add hundreds of thousands of barrels per day of gasoline supply to the market.The policy signal is important. Rather than treating refiners as the problem, policymakers appear to be treating refining capacity as part of the solution.The administration has acknowledged that refinery constraints, not just crude-oil prices, have contributed to higher fuel costs. Exxon CEO Darren Woods recently described a “disconnect” between crude prices and retail fuel prices created by refining limitations.But the physical limits remain.If American refiners are already running near maximum sustainable utilization, there is no presidential switch that creates millions of barrels per day of additional refining capacity.And the global nature of the market matters. U.S. refiners are not isolated utilities serving only American motorists. They operate in an international refined-products market. When Russian or Middle Eastern refinery output disappears, buyers look elsewhere. U.S. barrels become more valuable abroad. Domestic inventories feel the pull. Taken together, the White House’s actions suggest policymakers view gasoline and diesel prices primarily as a supply problem. Rather than pursuing an export ban, Washington appears focused on lowering regulatory costs, maximizing refinery utilization, expanding gasoline availability and encouraging incremental refining capacity wherever possible.That does not eliminate policy choices. It defines them.Gasoline Prices Do Not Have a Political PartyThe temptation in Washington is to treat gasoline prices as a partisan scoreboard. That is intellectually convenient and economically incomplete. Obama recognized that gasoline prices affected the public’s view of his presidency. Biden used the SPR, proposed tax relief and pressured refiners when gasoline prices surged in 2022. Trump is confronting high gasoline and record diesel prices in 2026 while heading toward congressional midterms.Each president faced different geopolitical events, different crude markets, different refining conditions and different policy constraints.The common denominator is the American consumer.Americans do not buy gasoline as a political statement. Most buy it because they have somewhere to go. And increasingly, gallons alone do not tell us how much Americans are going anywhere. Vehicle miles remain enormous and continue to rise. Air travel consumes jet fuel. Trucks consume diesel. Farmers consume diesel. Construction equipment consumes diesel. Ships consume fuel oil. The American economy remains a gigantic machine for converting energy into mobility and economic activity. Efficiency can reduce the gallons required per mile.It does not eliminate the mile.The Question We Should Be AskingThe immediate political question is easy: who gets blamed for $4 gasoline and record diesel?The more important economic question is harder:How much refining capacity, inventory, logistical redundancy and strategic petroleum infrastructure does the United States need for an economy that continues to drive, fly, ship, farm, manufacture and build while simultaneously supplying products into a volatile global market?EIA’s September analysis should move that question toward the center of the discussion.Gasoline imports are far below their recent historical average. Gasoline inventories are below normal. Distillate inventories are even further below normal. Global refinery disruptions have increased demand for American exports. U.S. refiners are shifting yields toward the products carrying the strongest scarcity premium. And major American refineries are already operating at very high utilization. That is not primarily a slogan. It is an industrial-capacity problem.The United States can debate how much petroleum it expects to consume in 2035 or 2050. It should. Technology will change the answer. Vehicle efficiency will change it. EV adoption will change it. Aviation, freight, population and economic growth will change it.But refineries are not built on election-cycle timelines. Neither are pipelines, terminals, storage facilities or ports. If the country wants resilient fuel prices, it has to decide how much resilience it is willing to finance, permit and maintain before the next disruption arrives.Because another disruption will arrive. And when it does, the price will again appear on a sign beside the highway.Democrat or Republican, the person in the White House will see it. So will every voter driving past. That is not primarily a political problem. It is an industrial-capacity problem.By oilandgas360.com contributor Greg Barnett, MBA.The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Oil & Gas 360. Please consult with a professional before making any decisions based on the information provided here. Please conduct your own research before making any investment decisions.