The Diesel Shock Came from Abroad, but the Missing Cushion Was Homemade
The Energy Information Administration reported on September 15 that the average retail diesel price was up more than 77 percent from a year earlier, attributing much of the increase beyond crude oil to unusually high refining margins amid tight global distillate supplies. The text cites simultaneous shocks: Persian Gulf oil exports ran at about half their pre-war level in August and diesel exports at roughly a quarter, or 390,000 barrels per day, while Ukrainian strikes cut Russian refining and China curtailed its own fuel exports, leaving global refinery output in August 4.2 million barrels per day below August 2025. U.S. refineries ran at 97 percent of capacity in the week ending September 11, with distillate fuel inventories 13 percent below the five-year average, and the Strategic Petroleum Reserve stood at about 285 million barrels, the lowest since November 1982.
Why it matters: The commentary frames the diesel price shock as a test of energy security, arguing that refining capacity and strategic reserves, not only crude supply, determine a country's cushion against supply interruptions.