Retail diesel falls 14.7 cents to $6.38 as Gulf crude flows recover
Retail diesel fell 14.7 cents to $6.382 a gallon in the latest EIA weekly average, the first drop in four weeks and the end of a three-week run of record highs. That number sets most fuel surcharges, so haulers feel it Monday. Crude is coming back out of the Persian Gulf. JP Morgan puts September Middle East oil flows at 17.5 million barrels a day, about 98% of pre-war levels, though the bank still sees fuel exports at only 58%. Brent traded near $103 and WTI near $90, both up on the month even after Tuesday's pullback.
Refined product is lagging crude out of the region, and diesel is the tightest link. A retreat in the benchmark helps, but one weekly decline does not undo a month of highs.
Russia's diesel ban
Russia extended its ban on diesel, marine fuel and gasoil exports for producers through October 31. It pulls barrels out of an already tight global diesel market and keeps a floor under prices even as Gulf crude returns. Trump held crisis talks over a separate idea, banning US diesel exports to hold down domestic pump prices. That would hit Gulf Coast refiners who ship product abroad, and it could tighten domestic supply and raise prices, the opposite of the goal. No decision yet.
The biodiesel credit
Grassley and Klobuchar introduced S. 5583 to extend the Small Agri-Biodiesel Producer Credit through 2029. It pays 20 cents a gallon on the first 15 million gallons for producers under 60 million gallons a year, using domestic crop oils and animal fats. The credit expires December 31, 2026, so the bill would buy three more years of certainty for small plants deciding whether to keep running. For jobbers blending biodiesel, the credit is part of what makes the blend economics work at the margin.
Ethanol at sea
A National Lab of the Rockies report says ethanol could work as a marine fuel, with the existing methanol dual-fuel fleet able to burn around 2 billion gallons a year under high-substitution cases. Maersk just completed the first US ship-to-ship ethanol bunkering. It is early, and none of it moves a gallon at your rack this quarter. A 2-billion-gallon outlet for corn ethanol would matter to the whole renewable fuel balance if it develops, and c-store operators selling E15 have a stake in where ethanol demand goes. Newsom also signed a law clearing the way for E15 in California, the last big state without the option.
What to watch
Whether the diesel decline holds or was a single week. If Gulf fuel exports climb back toward the 98% figure crude has already hit, product prices could ease further. Watch the Trump diesel-export question, which could cut the other way for domestic supply. And watch whether S. 5583 gets attached to anything moving before the December 2026 expiration, because small biodiesel producers need the answer to plan next year.