National diesel jumps 29.7 cents as crude nears $100 on Saudi refinery strikes
Diesel is up 29.7 cents a gallon in a week nationally, a record jump for the Labor Day stretch and the number squeezing your haulers right now. Regular gas is averaging around $4.15 nationally, up six cents on the week and 13 cents on the month, with a lot of states running well past that. Pennsylvania is at $4.30. The move is coming off the crude market, and the crude market is reacting to war.
Crude near $100
Brent traded up to $97.66 today, with WTI at $93.05. The push came after Houthi strikes hit energy sites in Saudi Arabia's southern region on Tuesday morning, setting fires at several locations and forcing Aramco to halt some operations near the Yemen border. An Aramco refinery was among the targets.
Layer on the US and Iran trading threats. Iran warned of "economic warfare" and said it fired a new missile at US warships. When the market prices in risk to Gulf supply, it shows up at your rack within days. Crude could ease if those facilities come back and the rhetoric cools, but nothing in the last 24 hours points that way.
The diesel crunch
The diesel spread over gasoline is wide because the world is short of distillate, and the people trading it say that holds into next year. Vitol CEO Russell Hardy put numbers on it: the market is missing roughly 2 million barrels a day from Russia and close to 2 million from the Middle East, with no refining capacity standing by to cover the gap. Reuters reports the tightness lasting through winter.
Part of that Russian shortfall is self-inflicted on Moscow's side. Ukrainian drones hit the Saratov refinery again, a plant that runs about 4.8 million tons of crude a year, one of several Russian refineries offline from repeated strikes. For haulers, the takeaway is that the diesel premium looks set to stay fat through heating season, so anyone locking freight rates should build it in.
Ethanol holding gas down
One thing working in the other direction at the pump. Ethanol is selling at least $1 a gallon below gas blendstock at the wholesale level, per the Renewable Fuels Association, which gives blenders plenty of reason to pour it in and takes some pressure off the retail gas number. USDA reported plants used nearly 475 million bushels of corn to make fuel alcohol in July, up 2% from June and 4% from a year ago. Blenders want the ethanol, it costs less than the gasoline it goes into, and that combination holds the retail gas number down.
Propane cylinders stay legal in California
For c-store operators who move disposable one-pound propane canisters, the Trump administration blocked California's planned 2028 ban on selling them. The Department of Transportation ruled federal law overrides the state, since those camping and grill cylinders are permitted under federal rules. The shelf item stays legal to sell in California, and any operator who was planning around a 2028 cutoff can stop.
What to watch
Whether Saudi facilities restart and how fast, since that sets the near-term crude bid. The distillate spread as winter demand builds on an already short market. And whether the Iran threats stay talk or move to something that touches Gulf shipping, which is the difference between crude near $100 and crude over it.