Global Diesel Shortage Drives Up U.S. Fuel Prices

Global diesel and gasoil availability dropped by 1.7 million barrels per day in the third quarter, driven by export disruptions in the Middle East and reduced supply from Russia and several Asian countries. This squeeze has pushed U.S. on-highway diesel prices to $6.276 a gallon, while distillate inventories have fallen to 12% below the five-year average.

The International Energy Agency traced the market tightness to these regional disruptions. In response to the resulting increase in input costs, the United States Department of Agriculture announced $8 billion in one-time payments to American farmers on October 19.

Energy markets remain volatile as the Energy Information Administration forecasts Brent crude will average $105 per barrel in the fourth quarter, noting that refiners are increasing crude demand to address the diesel shortage. Meanwhile, OPEC+ countries agreed on October 4 to maintain September production levels through November. Corporate activity in the sector remains mixed, with Halliburton reporting $5.7 billion in third-quarter revenue and International Seaways announcing a $370 million acquisition of a vessel owner.