Diesel crack hits record $99.13 as Ukraine strikes squeeze Russian refining
The diesel crack pushed to a record $99.125 a barrel yesterday, closing in on the $100 mark. That follows an 11% jump last week to $92.75, and it now runs 264% above year-ago levels. If you buy diesel to move freight or sell it off the island at your store, that margin is landing on you, and it is climbing faster than crude.
The reason for the surge is not just US demand. Refined product supply is getting pulled tighter overseas, and diesel is the barrel doing the moving.
Russian refineries hit
Ukraine struck the TANECO refinery in Nizhnekamsk, Tatarstan, on the night of August 20, setting off a fire on site. TANECO processes up to 16 million tons of crude a year and turns out motor fuels that supply the Russian army. A day earlier, drones started a fire at refineries in Ufa, in Bashkortostan, plants owned by Bashneft under Rosneft. The Taman oil terminal in Kuban took a hit too.
This matters to a US operator because Russian refining runs are a real chunk of global diesel and gasoil supply. Knock capacity offline and the barrels that would have cleared the market do not show up, which tightens the product side worldwide and feeds the crack you are already watching. Ukraine has shifted back to hitting refineries and export terminals after a stretch aimed at tankers, so more of this could keep pressure on product spreads.
Propane at a record
US propane inventories reached an all-time high, with the Midwest leading the weekly build and Gulf Coast stocks setting a regional record. For propane marketers heading into fall, that is the opposite of the diesel picture. Supply is deep, the Midwest is well stocked ahead of crop-drying season, and there is no scramble on the horizon. If you sell propane, the setup looks comfortable for now, though a cold early fall or heavy drying demand could draw those barrels down quicker than the record makes it look.
E15 in the Senate
Growth Energy CEO Emily Skor says year-round E15 has more momentum than it has had in the decade-plus this has been argued. A compromise bill passed the House in May with bipartisan backing, and Senate Leader Thune has flagged the measure as a priority. The plan is to attach it to the farm bill or another package expected to move in 2026. For c-store operators weighing whether to plumb for E15, permanent summer sales would settle the question that has kept a lot of sites from committing. It is not law yet, and a Senate vehicle still has to materialize.
What to watch
Whether the diesel crack clears $100 is the near-term one, and it depends heavily on how much Russian refining stays down and for how long. Watch the pace of the Ukrainian strikes and any read on repair timelines at TANECO and Ufa. On propane, watch the weekly builds and early-fall weather to see if that record actually holds or gets drawn down fast. And keep an eye on whether the Senate gives year-round E15 a real vehicle this fall, because that changes the math on E15 dispensing for a lot of retailers.