WSJ What's News Sep 20, 2026
With Benoît Morenne, Oil and Gas Reporter at The Wall Street Journal · Konrad Putzier, Economics Reporter at The Wall Street Journal
Inflation has been running around 3.5% this year. Without the war it would be near 2.5%, Konrad Putzier said, citing economists' estimates — a gap made almost entirely of gasoline, diesel, heating oil and airfares.
The usual read on an inflation number is that it describes a country. This one does not. Putzier, who takes the subway and flies on the Journal's expenses, says he has felt almost none of it, while a family in a rural state with two cars has absorbed all of it.
"So what you have is this big overall inflation impact that really only tells half the story because for some it's a disaster and for others it basically doesn't matter."
Konrad Putzier, an economics reporter at the Journal in New York, has been tracking the gasoline and diesel series through the war; Benoît Morenne covers the oil and gas industry out of Houston and spends his time with the executives selling into the spike. Both joined WSJ What's News to answer where prices go next.
The full segment is covered here so you can skip it.
Here are the 7 predictions that matter.
Key Takeaways
Economists put inflation at around 3.5% against about 2.5% without the war, and the difference is concentrated in four categories
The pain is geographic and behavioral, not national: a subway commuter has felt nothing, a rural two-car household has felt all of it
Airfares show no demand destruction — consumers feel wealthy, so airlines are passing fuel costs straight through
None of it has reached core inflation yet, which Putzier calls great news for the Fed and the thing that separates a one-off from a spiral
Chevron's chief executive says the mechanisms that cap price and supply risk "have largely played out", which Morenne translates as running out of options
A diesel export ban is the industry's nightmare, and could raise US prices rather than lower them if refiners simply make less
Price caps and cash handouts are both available and both rejected by economists; the straightforward tool left is the Fed raising rates again
1. The Energy Inflation Story
The host noted that Putzier's recent stories have carried a chart of diesel prices rising even faster than gasoline, and asked what stood out. Putzier answered with the whole category list.
Four energy categories are carrying this year's inflation
Gas and diesel prices have shot through the roof. Heating oil is up like crazy. Airfares, which obviously depend on kerosene prices, are up. So energy costs have really gone up for people, and that's the big inflation story this year.
Konrad Putzier
Economists put about a point of it on the war
In survey after survey, people say that they're really concerned about rising prices, and this year at least a lot of that's driven by energy. Inflation's been hovering around 3.5%. If it wasn't for the war, it'd probably be around 2.5%, economists estimate. So that's a pretty big difference.
Konrad Putzier
2. Who Actually Pays It
The concentration in a few categories is what makes the headline number misleading, and Putzier used himself as the control case.
A narrow price shock lands on some people and not others
Now, the interesting thing is that rising prices have been really concentrated in these very few categories, gas, diesel, airfare, heating oil, which means it's had a really targeted impact on some people and not on others.
Konrad Putzier
He has felt almost nothing of it, and a commuting parent has felt all of it
For example, I live in New York City. I take the subway to work. If I fly somewhere for a story, The Journal pays for the plane ticket. So I've basically felt almost nothing of this whole impact. But then again, if you drive to work, if you drive your kids to soccer practice, if you have a big car, it's been a huge pain for you.
Konrad Putzier
The same split runs across states.
Rural states have no alternative to the car
There are some states like Wyoming that are very agricultural where definitely no one takes the subway to work that are really feeling this a lot more than other places.
Konrad Putzier
3. Airfares Do Not Crack
The host raised airfares as the category where the expected consumer response has not happened: travel budgets are larger, portfolios are up, and people are absorbing the cost. Putzier said that is the mechanism of inflation rather than an exception to it.
Costs pass through because demand is there to absorb them
That's the interesting thing about inflation. Are people willing to pay more? Are companies actually able to pass costs on? Airfare is the perfect example where, yes, the costs have gone up for airlines because they have to pay more for fuel, but at the same time there's all this demand for travel. Consumers are in a pretty good place financially, wages are still sort of rising, stock markets are up, people feel wealthy.
Konrad Putzier
4. Core Inflation Is Clean
The test Putzier is watching is whether energy costs show up in the prices of things that are not energy.
Nothing has filtered into core inflation so far
Now, what we haven't seen so far is this really filtering through into core inflation, which is the thing that the Fed is always the most concerned about. So far, this is mostly an energy inflation story.
Konrad Putzier
No spikes in food, in packaging, or in the goods and services tied to energy, he said, which is what keeps this in the one-off category.
That distinction is what separates a shock from a spiral
As long as it's only an energy inflation story and nothing else, you can plausibly tell yourself that this will be a one-off, that this is not going to cause an inflation spiral.
Konrad Putzier
5. Running Out Of Options
The host turned to Morenne in Houston and asked whether energy executives are enjoying the prices or getting nervous. His answer was both.
The windfall is real and unwelcome at the same time
Yeah, there's definitely this duality that they are making a lot of money, and so that's definitely been good to their bottom line. But that being said, that's something that they've been really concerned about because higher oil prices have a tendency to slow the economy down. So you don't want that to linger on for too long.
Benoît Morenne
The warning stage, on his account, was six months ago.
The emergency conversation happened back in March
I would say that we're way past the in-case-of-emergency-brake-glass moment. That was really back in March maybe when those oil and gas CEOs were saying publicly and telling the administration that if the Strait of Hormuz did not reopen, then you would be stuck with a pretty dire fuel situation.
Benoît Morenne
Chevron's chief executive says the shock absorbers are spent
Mike Wirth, the CEO of Chevron, used some strong language about it at a recent conference in Texas. He said, "Those mechanisms that help to mitigate the price and supply risk have largely played out."
Benoît Morenne
Morenne's own translation of that sentence was "We're running out of options."
Stocks are drawn down and the reserves cannot carry it
Countries have drawn from their fuel stocks. You cannot tap strategic oil reserves much further. So prices can only go up from that. There's nothing to cap them anymore.
Benoît Morenne
Other chief executives are saying the same thing, he added: this is a phase of higher prices that has to be lived through.
6. Trump's Narrow Menu
With the midterms 40 days away and voting already under way in some states, the host asked what the president can actually do. Morenne started with the measure the industry fears.
The diesel export ban is the thing the industry wants ruled out
Trump has very limited options right now. One measure that the oil and gas industry is absolutely desperate to avoid is a ban on diesel exports, and the administration has repeatedly shut down the idea over the past few months.
Benoît Morenne
Recently, he said, the administration has started saying every option is on the table while still rejecting that one.
The ban could raise American prices rather than lower them
The idea is that you would limit how much diesel refiners in the U.S. can send abroad. In theory, this would beef up supplies domestically and then lower prices for Americans. But there could be really bad unintended consequences. If refiners cannot sell their product abroad, they might just make less of it overall, and then prices in the U.S. would end up going up.
Benoît Morenne
It would also damage the country's standing as a supplier to its allies. The remaining lever is somebody else's.
Chinese diesel exports would help at the margin
Short of that, one other solution would be to get China to export more diesel because it's reduced exports in recent months, but that would probably only help on the margins.
Benoît Morenne
Which leaves an argument rather than a policy
So really, it seems like Republicans will just have to sell to American voters that this is the price they have to pay for achieving whatever goals they set out early on in this conflict.
Benoît Morenne
7. Caps, Cash Or Rate Hikes
Asked what governments could do beyond that, Putzier laid out two radical options and dismissed both.
Price caps have a precedent and do not fix the shortage
The first one is price caps. Legally very complicated, but Richard Nixon did it in the 1970s, so there's some precedent. You basically ban the sale of gas for over $4 or something.
Konrad Putzier
A cap leaves the supply shortage in place and removes the signal that makes people change how they travel, he said: the point of an expensive gallon is that the driver with a subway alternative takes the subway, and the limited gasoline reaches the person who has no alternative.
And the bill arrives when the cap comes off
Usually, what happens with price caps is, once they get lifted, you get a surge of inflation.
Konrad Putzier
Handing out cash makes the inflation worse, not better
Then the second option is just to give people money, which is something that has been happening in Europe, where energy costs have gone up in the last few years. The issue with that is, if your worry is inflation, just giving people cash is not going to fix the inflation issue. If anything, it's just going to make it worse.
Konrad Putzier
Economists like neither, which is why neither is being seriously discussed. That leaves the third option, which is the one already in motion.
The straightforward answer is the Fed, and it just started
The Fed just raised rates. While that was not necessarily driven by oil prices, if we see more of this energy inflation shock seeping through into other categories, if we start seeing in surveys that people are getting more worried about inflation, which is always a very big deal that economists look for, it'll be likely that the Fed will be more aggressive in raising interest rates, and that's really the most straightforward way to deal with it.
Konrad Putzier
Bonus Insights
The show's own framing of the consumer number
Going into the break, the host said US gasoline prices are up over a dollar a gallon from a year ago, and asked whether there is any reason to expect a pullback before the midterms without an end to the Iran war. That figure is the program's, not either reporter's.
What economists watch for the turn
Putzier twice named the same indicator: consumer surveys. Concern about rising prices showing up in surveys is what he says economists treat as a very big deal, and it is the trigger he expects would push the Fed to move harder.
Where the two desks meet
Morenne's diesel export argument and Putzier's price-cap argument are the same argument in two markets: an intervention that holds a price down without adding supply changes who produces and who consumes, and the adjustment arrives later.
Their bottom line is that this is still an energy shock rather than an inflation spiral, that the tools for capping it are either spent or counterproductive, and that if it reaches the other categories the response will be a more aggressive Federal Reserve.
Products, Companies & Tools Mentioned
Chevron (Chief executive Mike Wirth told a conference in Texas that the mechanisms mitigating price and supply risk "have largely played out")
The Federal Reserve (Has just raised rates, and Putzier says it is the most straightforward answer if energy inflation seeps into other categories)
The Strategic Petroleum Reserve (Morenne says national fuel stocks have been drawn down and cannot be tapped much further, so nothing caps prices from here)
Listen to the full episode
🟣 Apple Podcasts | 🔗 Episode page
Listen to the full episode:
More Benoît Morenne interviews and podcast appearances
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: