Refined Product Shortage: Diesel and Gasoline Crisis Deepens
Key Questions
What is driving the current diesel and gasoline shortage?
The shortage stems from Russia's halt on diesel exports combined with Ukrainian strikes on 24 of 34 Russian refineries, pushing processing to a 21-year low. This has created acute product tightness that outweighs any crude supply glut in the near term.
Why has the crack spread reached an all-time high?
Crack spreads have surged above $70 due to severe refined product shortages amid ongoing geopolitical disruptions. US gasoline prices have also climbed above $4 per gallon as a result.
How are Ukraine's actions affecting Russian oil infrastructure?
Ukraine has struck multiple Russian refineries and is now targeting the shadow fleet, though without causing hull breaches. These moves have significantly reduced Russian refining capacity and export flows.
What role is the US-Iran conflict playing in oil and gas prices?
Renewed US-Iran hostilities have pushed benchmark oil prices above $90 per barrel and contributed to climbing gas and diesel prices in the US. The conflict adds further upward pressure on energy markets already strained by product shortages.
Is the crude oil market in surplus despite the product crisis?
Yes, a crude glut exists but is being masked by the dominant near-term risk of refined product tightness. Focus remains on diesel and gasoline supply constraints rather than upstream crude availability.
Crack spread at all-time high above $70; US gasoline above $4. Russia diesel halt and Ukraine strikes on 24 of 34 Russian refineries (processing at 21-year low) exacerbate shortage. Product tightness dominates near-term risk, masking crude glut. Ukraine now targeting shadow fleet without hull breaches.