Diesel Prices Just Broke Records. Worse Ahead?
Diesel prices just hit about $6.33 a gallon — 50 cents above the previous record — and Tom Kloza says trucking still has a long way to go. In this FreightWaves Today interview, Kloza breaks down why diesel is disconnecting from crude, how refinery outages and global conflict are squeezing supply, and why the next […] The post Diesel Prices Just Broke Records. Worse Ahead? appeared first on…
Diesel prices have reached $6.33 per gallon, surpassing the previous record by 50 cents. Tom Kloza, chief energy advisor at Gulf Oil, warns that the situation is likely to worsen over the next 100 days. The culprit behind the surge in diesel prices is the closure of Saudi Arabia's East-West pipeline, which has already caused a loss of about 7 million barrels per day of refining capacity.
This shortage is primarily due to closures in Russia and the Persian Gulf, with Saudi Arabia's Red Sea refineries accounting for 2% of global throughput. The situation is further exacerbated by seasonal demand and geopolitical disruptions. Soybean oil, the main feedstock for biodiesel and renewable diesel, has dropped below the price of traditional diesel for the first time in seven to eight years, enabling existing plants to ramp up production in a matter of months rather than years.
Despite this positive development, Kloza predicts that diesel prices will stay above $3 per gallon for at least the next 15 to 16 months.
Written by urgent.news from FreightWaves's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
