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If the Strait is Open, Why is Diesel at Record Highs?
Posted on 10/6/26 at 11:50 am
Posted on 10/6/26 at 11:50 am
Nearly just as much crude oil is passing through the strait on a daily basis as before the Iran war began. Yet diesel remains at record highs.
That’s because people don’t buy crude oil. They buy gasoline, jet fuel, and diesel.
Iran played their limited hands masterfully when they destroyed the refinement capacity of their gulf neighbors. Given the time it will take to return those to operating capacity, diesel, and therefore costs of goods, will remain high for the next several months.
Be wary of claims “the strait is open” without proper context. I suspect this is why the administration is delivering free money checks in an attempt to distract from the fact prices will unfortunately remain high for a while, and they did not properly evaluate Iran’s actions.
That’s because people don’t buy crude oil. They buy gasoline, jet fuel, and diesel.
Iran played their limited hands masterfully when they destroyed the refinement capacity of their gulf neighbors. Given the time it will take to return those to operating capacity, diesel, and therefore costs of goods, will remain high for the next several months.
Be wary of claims “the strait is open” without proper context. I suspect this is why the administration is delivering free money checks in an attempt to distract from the fact prices will unfortunately remain high for a while, and they did not properly evaluate Iran’s actions.
Posted on 10/6/26 at 11:58 am to RFK
Anyone that knows anything says it’s 2 things:
1. Ukraine attacking Russian refineries
2. Not enough refining capacity in the USA because of climate change believers
ETA: actually not enough refining capacity in the world due to wacko climate change believers.
1. Ukraine attacking Russian refineries
2. Not enough refining capacity in the USA because of climate change believers
ETA: actually not enough refining capacity in the world due to wacko climate change believers.
This post was edited on 10/6/26 at 12:03 pm
Posted on 10/6/26 at 11:59 am to RFK
Fear
Posted on 10/6/26 at 12:00 pm to RFK
Oil cannot be refined overnight...
Posted on 10/6/26 at 12:01 pm to RFK
It’s your boy Zelensky.
Posted on 10/6/26 at 12:05 pm to RFK
What’s your position in the Iranian government?
How’d you survive to this point?
How’d you survive to this point?
Posted on 10/6/26 at 12:06 pm to UptownJoeBrown
quote:
Anyone that knows anything says it’s 2 things:
No exports from Chinese refineries.
Posted on 10/6/26 at 12:06 pm to RFK
What do you think has to happen to that oil to be useful?
Posted on 10/6/26 at 12:08 pm to RFK
Just a few years ago the forecast was a glut in global refining capacity.
The world wants US diesel. We have no shortages here.
Free market supply and demand. We have always export due over capacity in the US
The world wants US diesel. We have no shortages here.
Free market supply and demand. We have always export due over capacity in the US
Posted on 10/6/26 at 12:09 pm to RFK
Loading Twitter/X Embed...
If tweet fails to load, click here. The G7 is preparing to tap its emergency reserves.
I think there is a lot of propaganda over the Strait. The real story in energy markets is being told in:
- Bond markets.
- Crack spreads.
- Reserves drawdowns.
- Threatened and real diesel export restrictions.
- Price at the pump.
This post was edited on 10/6/26 at 12:13 pm
Posted on 10/6/26 at 12:12 pm to RFK
Trump destroyed all the diesel wells, duh.
Posted on 10/6/26 at 12:15 pm to RFK
quote:
If the Strait is Open, Why is Diesel at Record Highs?
If you're a lawyer and therefore theoretically an intelligent person, why is every thread you ever create so fricking stupid?
Posted on 10/6/26 at 12:16 pm to coolpapaboze
quote:
Trump destroyed all the diesel wells, duh.
Upvote
Posted on 10/6/26 at 12:17 pm to UtahCajun
quote:
Oil cannot be refined overnight...
So where is there a shortage? Please sgiw me wgere duesel isnt available in the US.
Let me guess, higher prices makes more diesel available? Or it makes refineries able to produce more?
Posted on 10/6/26 at 12:18 pm to RFK
Bombing oil refineries in Russia doesn't help the global supply.
quote:
Ukrainian drone and missile strikes have disabled or forced output cuts at a major portion of Russia's top diesel-producing refineries.
quote:
“When diesel fuel becomes scarce elsewhere in the world, it raises prices and leads U.S. companies to export more refined products, including diesel,” said Kenneth Gillingham, a Yale University economist who specializes in energy and environmental issues.
quote:
Limited refinery capacity is further exacerbating consumer costs.
“The challenge is running out of places to refine crude oil into consumer products,” York said. “U.S. refineries are running at 97% to 98% utilization.” Patrick De Haan, head of petroleum analysis for GasBuddy, which tracks U.S. gasoline prices, estimated that 60% to 65% of the recent diesel price spike stems from Ukrainian attacks on Russian facilities, with the remainder caused by Iran’s efforts to choke off transit through the Strait of Hormuz and other vital transit points.
This post was edited on 10/6/26 at 12:46 pm
Posted on 10/6/26 at 12:27 pm to RFK
Because you are….
Stupid
Stupid
Posted on 10/6/26 at 12:27 pm to RFK
quote:
Iran played their limited hands masterfully when they destroyed the refinement capacity of their gulf neighbors. Given the time it will take to return those to operating capacity, diesel, and therefore costs of goods, will remain high for the next several months.
I see you missed the 4 California refineries shuttered or converted since 2020. And Ukraine contributing by destroying Russian refining capacity.
And I don't know why the left is complaining. Remember Stephen Chu, Obama's energy secretary in 2008? That was praised by much of the left?
“Somehow,” Chu said, “we have to figure out how to boost the price of gasoline to the levels in Europe.”
And you people reelected Obama. So what's the worry now? Did you really not want that... you just voted and believed as you were commanded to do?
No difference in the left being so worried about data center power consumption when they were full on in favor of every home in America having an electric car charging off the grid. What's the problem now if there was none then?
This post was edited on 10/6/26 at 12:35 pm
Posted on 10/6/26 at 12:36 pm to RFK
The muh gas crowd isnt gonna be happy when they vote for a bunch of tree hugging commies who would gladly force them to walk everywhere and will do everything in their power to raise energy prices across the board if given power.
Posted on 10/6/26 at 12:39 pm to RFK
What do you mean "it The Strait is open"? There's an easy test. Volume before "closing" vs volume now. Why pretend that these things are unknowable?
Posted on 10/6/26 at 12:40 pm to CleverUserName
quote:
Somehow,” Chu said, “we have to figure out how to boost the price of gasoline to the levels in Europe.”
I don't agree with this at all, but I wanted to give context. He wanted to do this over the course of 15 years to encourage people to buy more fuel efficient vehicles and live closer to work.
Take from that what you will.
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