Global Refinery Shortages Drive Diesel Prices to Record Levels
U.S. diesel prices have reached a record high above $6.50 per gallon as global refining capacity struggles to compensate for the loss of supply from Middle Eastern and Russian sources. Russia has extended its diesel export ban until October, citing ongoing Ukrainian drone attacks on refineries. However, losses in the Middle East are significantly greater than those in Russia, according to reports by the International Energy Agency cited by the Wall Street Journal. The shortage is prompting political action in the U.S., with calls for a diesel export ban from some members of Congress ahead of November’s midterm elections. While such a move could lower domestic prices, it risks worsening global fuel supply issues. The crisis has been exacerbated over the past decade as refineries were shuttered or repurposed due to pressure from net-zero policies and poor returns on investment. Meanwhile, Middle Eastern countries expanded refining capacity for reasons other than profit—such as employment and energy security—but this infrastructure is now under threat from Iranian attacks. The situation has been further complicated by the idling of a European refinery owned by sanctioned Russian firm Lukoil.
Topics: Diesel Prices Global Energy Crisis Refinery Capacity U.S. Policy Response