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Bob McNally Warns of Global Fuel Supply Crisis as Refinery Disruptions Drive Up Diesel Prices

Bob McNally, president of Rapidan Energy, warns that a global fuel supply crisis is emerging as refinery disruptions in Russia, China, and the Middle East drive up diesel prices. While oil prices remain high, the underlying issue is a lack of refining capacity. Ukrainian drone attacks have crippled 40% of Russia's refining capacity, forcing Moscow to ban diesel exports through 2027. Simultaneously, the standoff in the Strait of Hormuz and attacks on Middle Eastern refineries have further constrained supply. This shortage has caused diesel prices to hit $7 per gallon in California and average $5.50 across the U.S. These costs are passed to consumers through higher grocery and freight costs. Despite these disruptions, refiners are seeing record-profit margins, with the diesel crack spread reaching a historic high of $102 a barrel. Analysts suggest that prices will remain elevated until damaged refineries in Russia and the Middle East are repaired and exports from China and Iran reach a breakthrough.

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