U.S. diesel prices have reached record levels, allowing major refiners to generate record profits during the second quarter of 2024 [1, 2].
The surge in prices impacts the entire supply chain, as diesel is essential for transporting goods and powering industrial machinery. This price spike creates a paradox where consumers face a crisis while energy companies see unprecedented financial gains.
Market data shows the diesel crack spread—the difference between the price of crude oil and the price of the refined product—hit a record $102 per barrel [1]. This figure represents five times the normal level for the industry [1].
Several factors converged to create this shortage. Refinery strikes and an export ban imposed by Russia tightened the available supply of diesel [1]. Because these disruptions affected the refining process specifically, increasing the overall supply of crude oil could not alleviate the shortage [1].
Three refiners in the United States capitalized on these market conditions. Among them, Marathon Petroleum and Valero more than doubled their per-barrel refining margins during the second quarter of 2024 [1].
While the broader economy struggled with the rising cost of fuel, these companies turned the supply crisis into a period of record profitability [1, 2]. The combination of limited supply, and high demand, ensured that the margins for refined diesel remained at historic peaks.
“Diesel crack spread hit a record $102 per barrel”
The record diesel margins highlight a critical vulnerability in the energy supply chain: the 'bottleneck' at the refinery level. Even when crude oil is available, a lack of refining capacity—caused by labor disputes or geopolitical bans—can trigger price shocks. This suggests that energy security depends less on raw resource availability and more on the stability of the processing infrastructure.
