US refinery tightness means diesel could drive inflation even with steady oil prices

Even as the US and Iran continue to exchange strikes, crude oil prices have stayed well below their 2026 peaks. The diesel market, however, is sending a more alarming signal.

The crude oil crack spread – which measures the gross profit margin a refinery makes by turning crude oil into usable fuels – keeps trending higher. Notably, the diesel crack spread exceeded $100 per barrel in mid-August for the first time ever. And diesel is the most important fuel for industries that harvest food, move freight and build infrastructure.

Refining bottlenecks, freight and logistics risks have kept diesel prices elevated. (Global refinery crude throughput averaged 80.9 million barrels per day in July, down about 5 million ​barrels from a year earlier, the International Energy Agency recently reported.)

Seasonality could make these strains worse. US diesel demand typically picks up in autumn, when agricultural and freight activity rises. With diesel inventories much tighter than the usual trend at this time of year, the market could be entering an even worse crunch.