Diesel prices climb as Russian refinery strikes tighten supply; gasoline averages $4.146
Diesel prices are climbing even as crude oil holds relatively steady, and that split is the problem for anyone moving freight. Analysts had flagged this one coming: a shortage of refining capacity showing up in the fuel that carries the rest of the economy. Jeff Currie put it plainly, saying the market is "out to lunch, looking at crude oil prices." He's right that the crude tape is misleading here. Diesel is buried in the cost of moving freight, so a run-up in the product raises prices at the grocery store and the truck stop before it ever shows up as a crude headline.
Russian refinery strikes
Ukrainian drones hit Russia's Afipsky oil refinery and the Astrakhan gas processing plant overnight on August 24-25, and Ukraine's General Staff confirmed both strikes. The Perm refinery suspended operations after a separate drone strike, and a storage tank caught fire in Krasnodar Krai. Each hit pulls Russian refining offline, which tightens global product supply. US jobbers don't buy Russian diesel, but they buy into the same world market for distillate, and every barrel of refining capacity knocked out over there firms up the price here.
Gasoline
The national average for regular is $4.146 a gallon, down 3 cents over the past two weeks and down 44 cents from the mid-May peak. That relief looks temporary. Wholesale gasoline prices are jumping in response to the move in crude, and a retail turnaround is already starting, so the pump price could firm up again in the coming days. WTI closed at $87.06 a barrel on August 21. For context on what customers are feeling, the average is 92 cents higher than a year ago, when regular was $3.22. C-store operators watching foot traffic should expect the sticker shock to keep pressure on inside sales.
The trucking squeeze
Diesel is going up while truckload spot rates keep falling, and that divergence is squeezing carriers from both sides. FreightWaves' SONAR data shows the disconnect widening: higher fuel costs feeding into every mile, weaker freight rates giving carriers no room to pass it on. Fuel surcharges recover some of it on contract freight, but spot-exposed carriers and owner-operators eat the gap. For fuel haulers, the read-through is a customer base that's paying more for product and earning less on the load, which tends to slow buying and stretch out payment.
Asian refiners have been buying up US crude, which pulls barrels toward export and gives domestic refiners one more reason not to flood the market with cheaper product. That export pull is another quiet support under US prices even when the crude number looks soft.
What to watch
Whether Russia gets the damaged refineries back online quickly, or whether the outages stack up and keep distillate tight. Watch wholesale gasoline: if it keeps leaping, the 3-cent retail dip reverses fast and the pump average heads back up. Watch the diesel-versus-spot-rate gap, because the longer it holds, the more it pinches the carriers your customers depend on. And keep an eye on Strait of Hormuz shipping and insurance costs, which could ease crude if the passage stays open or add to it if the risk climbs again.