Economist Paul Krugman argues that the Donald Trump administration’s attempt to blame Ukraine for soaring fuel prices highlights that Washington is powerless to alter Kyiv’s strategy, as officials have “no cards” left to fulfill promises of cheaper gas.
Bessent Points to Kyiv’s Drone Attacks
Speaking on Fox & Friends on Sept. 2, Treasury Secretary Scott Bessent cited Ukraine’s military actions as a major factor behind rising domestic fuel costs.
Bessent stated that the world is experiencing an “energy shock” because “Ukraine has decided that they want to blow up Russian energy assets and refined properties,” creating upward price pressure alongside the ongoing conflict in Iran.
Reacting to the administration’s diminished influence, Krugman said in his Substack post that officials wish Ukraine would stop blowing up Russian energy assets, but “they can’t, in practice, do anything to change Ukraine’s war strategy,” adding: “They’re not in a good position. They don’t have the cards.”
Krugman Explains Washington’s Lost Leverage
Analyzing the political fallout, Krugman argued that the administration’s predicament stems from its own hostile foreign policies.
After Washington attempted to negotiate what Krugman termed a “Belgian Congo” deal to claim half of Ukraine’s mineral revenue, Kyiv rejected the offer as an unenforceable shakedown. In response, Washington cut off nearly all military aid.
Ukraine sustained its defense through European support and developed advanced drone capabilities to target Russian economic assets. Because the U.S. has already halted aid and depleted its missile interceptor stocks during the Iran conflict, Krugman asserts that Washington can no longer threaten or persuade Kyiv to halt its strategic air campaign.
Fuel and Gas Prices Soar
Ukraine’s drone campaign against Russian energy infrastructure has resulted in Moscow slashing its oil output forecast to a 17-year low of 9.88 million barrels per day.
Current AAA data highlights the domestic strain, with the national average for regular gas at $4.14 per gallon and diesel climbing to $5.78.
At the last check, Brent Crude futures were trading near $97 per barrel, about 1.00% higher at $96.59; meanwhile, WTI Crude futures were 1.43% higher at $92.29 per barrel. Brent tracker, United States Brent Oil Fund, LP (NYSE:BNO), was 1.22% higher, whereas United States Oil Fund, LP (NYSE:USO), which tracks WTI, was 1.43% higher at $143.15 in premarket on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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