Refining Bottleneck Sends Diesel to Record High

Summary

Patrick De Haan of GasBuddy explains that record diesel and elevated gasoline prices are driven by a global refining bottleneck rather than crude oil supply. He highlights Russian refinery attacks, Middle East shipping constraints, lost US/European refining capacity, and seasonal maintenance that leave little room to boost fuel supplies. High crack spreads make refining lucrative, and he says more crude alone won't quickly solve the problem.

• Diesel prices hit record highs while gasoline also remains elevated.
• Russian refinery attacks reduce heavy-oil refining capacity, especially diesel.
• Middle East refineries face Strait of Hormuz and East-West pipeline constraints.
• US refineries are running near 98% utilization with little spare capacity.
• Seasonal maintenance and turnarounds further limit product supply.
• High crack spreads make refining economics extremely lucrative.
• More crude supply won't quickly translate into more gasoline and diesel.
• Dangote refinery is cited as a rare new capacity source hitting its stride.