Diesel completly decoupled from crude. Iran-related disruptions and Strait of Hormuz constraints on Middle East product flows have created a global diesel shortage. US and global distillate inventories are at multi-decade seasonal lows while refining utilization is near maximum. Crude still has partial offsets (SPR releases, softer demand pockets), so WTI lags; diesel crack spreads have hit record $100/bbl levels. Ukrainian drone strikes knocked out Russian refining capacity that led to export bans contributed to this. Also Trump admin leaks to Axios claims of a “secret corridor” moving 10M bpd through Hormuz. Ship trackers and satellite imagery show lack of evidence tho as tankers dont move through the Oman corridor. Headline from trusted outlet (Axios) along with WH announcements trigger news-sentiment algos and HFTs that score "extra supply" positive and buy/sell within milliseconds. Human traders follow the momentum. By the time trackers disprove volumes, the price move is already priced in and hard to fully reverse. xDSPR is already near historic lows (293 Mbbl). Further draws leave little buffer. Ongoing Russian/ME product shortages will tighten diesel further. Probable scenarios: diesel cracks widen more; US retail diesel could spike toward $8+/gal. Crude, no longer cushioned by SPR releases, likely catches up - WTI/Brent potentially testing $110-140 if Hormuz flows stay impaired. I estimate peak pressure Q4 2026.
>>541314498>axios>trusted
>>541314498>Diesel completly decoupled from crudeNo. Futures are decoupled from reality. Diesel is an actual thing people need so if supply is disrupted or if there are shortages it will be reflected in the price right away.
>>541314588Thats what i wrote, actually xD
>>541314498Don’t worry. Trump will defeat Iran in two weeks.
>>541314556This is what OP argued, though. That Trump and Axios are bulshitting, because the U.S. and Israel need oil prices to stay low, even if they have to lie blatantly and make up delusional stories.
>>541314663If the US and Iran decide to restart the hostilities again, and Iran destroys some crucial Gulf oil/refining infrastructure in the process, prices could jump even more xD
>>541314498WTI isn’t used primarily to make diesel. It is a light sweet crude. Diesel requires a heavier crude to make. Also even if it was a heavier grade refining crude oil is different because they aren’t building as many new refineries in the west and expanding them requires niche specialized equipment that has a lead-time of 4-5 years. Petroleum engineering is complicated and so is the logistics of supplying them petroleum based products.
>>541314873Diesel does not require heavier crude. Light sweet WTI is routinely refined into diesel, natural yields are lower than from heavier grades tho. Complex refineries adjust via hydrocracking etc
>>541315015They can make heavier petroleum products via oligomerization. It’s harder to do than cracking and isn’t as profitable anyway. Cracking is used to break down longer hydrocarbon chains into shorter ones. This is primarily used to make lighter products from heavier grades. Anyway, coastal refineries in gulf states of the US are set up to use heavier grades of oil from Venezuela, Columbia, and Mexico back when Venezuela was aligned with the US and was the wealthiest country in Latin America. Up until 2015 it was illegal to export US crude oil since the 1970s. Export facilities still can’t export all the WTI to the world markets even with massive improvements to port facilities because fracking requires a higher price per barrel than most methods other than oil sands to remain competitive to extract. This also made it harder to finance. For Europeans Brent Crude, Arab, and Iranian oil is slightly heavier than WTI and slightly less sweet. Syrian and West Permian is easier to refine into Diesel but supply is fucked.
US has just 41 days of crude oil inventory left, the lowest level in half a century
>>541315641True. It’s bad. But like I said it’s compounded by the fact that Venezuela oil and heavier grades of oil are harder to obtain within the US. The US refineries are configured within the Gulf coast, SoCal, and WA to refine heavier oils. PEMEX is having issues in Mexico. This is relevant for diesel. Also not all oil is the same. Even for gasoline it’s more profitable to export WTI and Bakken crude (Montana oil) despite being harder to export isn’t compatible with 50 year oil heavier oil based facilities. Western Oil policy isn’t designed to benefit consumers.
>>541315641The salt levels are so low the whole storage facility is going to start falling apart.
>>541317704>The salt levels are so low the whole storage facility is going to start falling apart.That's an interesting thought. Where did you get it from?
>>541314498How many months until noticeable impact from that happens?
>>541314498They keep trying to manipulate the markets with fake announcements to trick oil speculators to then get fucked in the future when they have to deliver oil at a lower price.
