Refinery Outages Drive Diesel Price Surge
Oil prices have been rising in recent months, but gasoline and diesel prices at the pump are even higher. According to AAA, the national average for regular gasoline was about $4.49 a gallon on Saturday, up from $3.15 a year earlier. Diesel is worse off, with an increase of roughly 75 percent over the same period.
The gap between crude and finished fuel prices can be attributed to refinery outages. Enverus Intelligence Research estimated that around 7 million barrels a day of Middle Eastern and Russian refining capacity are damaged or constrained by conflicts involving Iran and Ukraine. This is equivalent to about 7 percent of global distillation capacity.
As a result, diesel has outrun gasoline and both have outrun crude prices. The International Energy Agency has cut its outlook for both Middle East and Russian processing due to the reduced refined product on the water. President Donald Trump has also weighed in on the issue, stating that Ukrainian strikes are hurting global diesel prices.