US truckers paid an average of $6.529 a gallon for diesel in the Energy Information Administration's September 21 survey, the highest national price in a weekly series that starts in 1994. The same gallon cost $3.749 a year ago.
Crude went the other way. WTI traded near $91 a barrel on Tuesday after touching $106.47 last week, and Brent sat just under $100. Traders have been stripping risk premium out of crude since Saudi loadings recovered, and part of the WTI move is a contract roll rather than a fresh selloff.
That split is the story. The world is not short of crude. It is short of the refining capacity needed to turn crude into diesel.
Tanks are running dry
US distillate stocks, the category covering diesel and heating oil, fell to 107.9 million barrels in the week to September 11. For that point on the calendar it is the thinnest cushion on record going back to 1982.
The EIA expects it to get thinner. Its Short-Term Energy Outlook, published September 9, forecasts distillate inventories dropping below 100 million barrels during September, then holding beneath the 2021-2025 five-year floor for the rest of this year and most of 2027.
Stocks slipped out of the normal five-year band back in April. They have not climbed back inside it since.
Other trading hubs tell the same story:
- Amsterdam-Rotterdam-Antwerp, Europe's main storage cluster for refined products, held distillate stocks 16% below its five-year average in July
- Singapore's distillate inventories have averaged roughly 8.2 million barrels in recent weeks, down from a 2025 average of 9.6 million
Why refining is the bottleneck
Four constraints hit diesel supply at once.
Refineries across the Middle East have been damaged in the fighting, removing a large source of export barrels. Ukrainian drone strikes have repeatedly cut Russian refining runs, and Moscow has extended its ban on diesel exports through October to keep fuel at home. China has kept a tight lid on refined product export quotas.
Then there is shipping. Traffic through the Strait of Hormuz is still restricted, which caps how much Gulf product reaches buyers even when a refinery is running normally.
Crude is substitutable. A barrel from West Texas does roughly the same job as a barrel from the Gulf. Refining capacity is not substitutable on any useful timescale, because new units take years to permit and build.
The storage market is sending a signal
Tank operators are watching the squeeze from an unusual angle. They have space, and no takers.
Capacity available for lease across North America and the Caribbean rose to 13 million barrels for October, up from 11 million in June and the most in four years, according to brokerage The Tank Tiger.
Lessees are walking away instead of renewing, the firm's chief operating officer, Steven Barsamian, told Reuters. As he put it: "Why would you pay for a storage tank when there is no diesel to store?"
Empty tanks sitting alongside shrinking inventories is an odd pairing, and Barsamian reads it as a bet by the trade that scarcity holds at least through the opening months of 2027.
What it costs everyone else
Diesel moves freight, farm equipment, construction machinery and mine haulers. When it climbs, the cost turns up in nearly everything that gets shipped.
Refiners are capturing much of the difference. The EIA estimates US diesel crack spreads, the margin between crude and the diesel refined from it, will hold above $2 a gallon from August through November before easing through mid-2027.
"Current fundamentals point to higher prices staying here for a while," said Alex Hodes, director of energy market strategy at StoneX.
What would break the cycle
The EIA forecast does assume relief arrives. It puts the 2026 retail diesel average at $5.07 a gallon and 2027 at $4.40. That second figure rests on two conditions: tanker traffic through Hormuz returning to normal, and damaged Middle East refineries coming back online.
Neither has happened.
Three things are worth watching. The weekly EIA distillate number, for the first inventory build that actually holds. Whether Russia lets its export ban lapse after October. And the crack spread, because margins will narrow before anything else does once the bottleneck loosens.
Until one of those turns, the pump price is doing the rationing.