US diesel margins exceed $100 a barrel amid global fuel crunch

Making diesel from crude oil in the US has never been more profitable. The diesel crack spread, which measures how much money refiners earn by converting a barrel of crude into diesel fuel, surged to an intraday record of $102.20 per barrel on August 17. It’s the first time this benchmark has crossed the $100 mark, and it reflects a global fuel market that’s being squeezed from nearly every direction simultaneously. To put that number in perspective, the previous record was roughly $97 to $98 per barrel, set just five months ago in mid-March. A typical diesel crack spread in calmer times hovers in the $20 to $40 range. So $102 is not a blip. It’s a flashing red signal about the state of global fuel supply. Why diesel margins are breaking records The short answer: too many things going wrong at once. Ongoing conflicts in Iran and Ukraine continue to disrupt energy flows. Attacks on Middle Eastern refineries have taken processing capacity offline. And Russia’s ban on diesel exports, extended until at least January, has removed one of the world’s largest diesel suppliers from the market. Layer on top of that the seasonal timing. August sits squarely in peak agricultural demand season ...