US Diesel Crack Surpasses $100 as Supply Disruptions Worsen

The US diesel crack has hit an all-time high of $102.20 a barrel, surpassing $100 for the first time on supply disruptions from wars in Iran and Ukraine. Global supply chains are under pressure due to peak agricultural consumption season. The International Energy Agency reported that global refinery crude throughput averaged 80.9 million barrels per day in July, down about 5 million bpd from last year.

The ongoing wars have put immense pressure on global diesel stockpiles, with key suppliers like Russia and the Middle East experiencing disruptions. Middle Eastern exports have been hit hard by attacks through the Strait of Hormuz, while Russia has banned international sales due to Ukrainian attacks on its refineries. US refiners have ramped up diesel production to benefit from record high cracks, but stockpiles are still declining in the country due to strong export demand.

The U.S. distillate fuel inventories, which include diesel and heating oil, stood at 107.1 million barrels as of August 7, the lowest for this time of year since 1996. Experts warn that the diesel crisis could worsen due to US pressure on Iranian exports and threats of penalties on China for buying Iranian crude oil.