Global Energy Market Faces Severe Fuel Shortage Amid Refining Disruptions
The global energy market is facing a new risk as high oil prices are compounded by an increasingly severe shortage of refined fuels. The blockade of the Strait of Hormuz, which initially disrupted crude oil supplies, is now creating problems with the availability of gasoline, diesel, and jet fuel.
The refining industry is coming under pressure from multiple factors at once, including military action, damage to plants, and export restrictions. As a result, the amount of oil available on the global market that can be quickly refined into fuel for transport, aviation, industrial facilities, and logistics is shrinking.
The diesel crack spread, a measure of a refinery's profit from processing one barrel of oil into diesel, reached $102 per barrel for the first time, nearly three times its pre-war level. This has exposed a fragile system that is struggling to keep up with demand.