The global diesel crisis is intensifying, with prices in Europe soaring by 70% and US crack spreads reaching new highs. This situation is expected to persist for several months, potentially even longer than the conflict in the Middle East.
The global diesel supply crunch is worsening, and the crisis could persist for months even if the conflict in the Middle East ends. Currently, European diesel prices have surged 70% above pre-war levels, and diesel prices have surpassed jet fuel for the first time in over a year. The U.S. diesel crack spread broke into triple digits for the first time earlier this week, reaching $102 per barrel. Data from the International Energy Agency shows that approximately one-fifth of the Middle East's refining capacity (9.6 million barrels per day) has been damaged due to the conflict, while Ukrainian drone attacks on Russian refineries have led Russia to suspend diesel exports, exacerbating global supply tightness. Analysts warn that inventory depletion and declining refining capacity will keep inflation risks high, especially as winter approaches in the Northern Hemisphere, which will further increase diesel demand.
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