The last plotted Brent price (August 25) is below $90. November NYMEX futures is over $95 as of 7pm CT:
3 thoughts on “Diesel Prices Remain Elevated”
Macroduck
Well this is embarrassing. I spent a good bit of time looking for diesel price elasticities and inventory data and the like, trying to figure out why diesel prices have risen so much more than gasoline and jet A. Egg on my face.
Russia stopped exporting diesel, off and on, in 2025. It now exports more crude, relative to distilled products, than pretty much ever before. The more refineries Ukraine bombs, the wider the crude/diesel price gap.
Another piece of this comes from China. They have idled certain refineries with a ban on export of refined products.
They used to have a great business buying “banned” crude from Iran, refining it and then exporting the refined products. When the Hormuz closed they just did a blanket ban on export of refined products. This was so effective that they apparently have not yet been forced to dip into their (huge) strategic reserves. My guess is that their gas and diesel prices have also remained pretty stable – but I don’t have the numbers.
So the world is short on refining capacity not just because Ukraine is destroying refineries in Russia but also because China has idled some of theirs.
Well this is embarrassing. I spent a good bit of time looking for diesel price elasticities and inventory data and the like, trying to figure out why diesel prices have risen so much more than gasoline and jet A. Egg on my face.
Russia stopped exporting diesel, off and on, in 2025. It now exports more crude, relative to distilled products, than pretty much ever before. The more refineries Ukraine bombs, the wider the crude/diesel price gap.
Jeebus, where’s my head?
Another piece of this comes from China. They have idled certain refineries with a ban on export of refined products.
They used to have a great business buying “banned” crude from Iran, refining it and then exporting the refined products. When the Hormuz closed they just did a blanket ban on export of refined products. This was so effective that they apparently have not yet been forced to dip into their (huge) strategic reserves. My guess is that their gas and diesel prices have also remained pretty stable – but I don’t have the numbers.
So the world is short on refining capacity not just because Ukraine is destroying refineries in Russia but also because China has idled some of theirs.
$5.85 a gallon today!