U.S. Diesel Reserves Sit Near 23-Year Lows
Brent and WTI futures remain below $100 a barrel on Tuesday morning, partly suppressed by governments releasing strategic oil reserves into global markets. But the more serious issue is building downstream, where the Russia-Ukraine war, strikes against energy infrastructure, and continued disruptions around the Strait of Hormuz are fueling the refined-products "perfect storm" we have repeatedly…
U.S. diesel reserves are at near 23-year lows, contributing to a refined-products crisis exacerbated by geopolitical tensions and infrastructure attacks. The Russia-Ukraine war, energy infrastructure strikes, and disruptions around the Strait of Hormuz are fueling the crisis. Diesel prices are rising faster than crude, with the latest breach surpassing $101 per barrel on the NYMEX one-month heating-oil/WTI crack spread.
The Strategic Petroleum Reserve (SPR) releases are not sufficient to address the downstream fuel shortage, as the US SPR stands at below 300 million barrels. The perfect storm of diesel shortages and rising fuel costs threatens farmers, freight operators, and consumers with higher prices for food and goods.
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