Diesel refining margins hit record $60 a barrel as Hormuz risk lifts Brent above $76

Refining margins for gasoline and diesel hit record highs this week. That matters to US buyers more than the crude headline, because a wide crack spread keeps wholesale fuel expensive even when crude backs off. European diesel margins topped $60 a barrel Wednesday, an all-time high, per OilPrice. Blame the Middle East re-escalation and Russia's ban on diesel exports, both landing on a market where global fuel inventories were already thin. For a jobber, the read is simple: rack prices could stay firm into the fill even if Brent softens.

Hormuz again

Brent is above $76, up about $4 a barrel this week, after renewed US-Iran strikes slowed traffic through the Strait of Hormuz back toward a near standstill. August WTI was $71.84 Thursday evening, up $3.38 or 4.94% on the week, with a range from $67.82 to $76.08. A series of unclaimed airstrikes hit Iran after Washington said it had finished its attacks, and prices drifted rather than jumped Friday. The IEA warned the re-escalation could upend its call for an oil surplus next year. North Sea Dated had fallen by $31 in June to $68 by early July, its lowest since January, so this week's bounce only claws back part of that.

Russian barrels

The IEA cut its Russian crude production forecast for 2026 and 2027, citing Ukrainian drone strikes on refineries and other oil infrastructure. Russia averaged 9.2 million bpd in 2025, and both this year and next were marked down. Fewer Russian barrels, plus Moscow's diesel export ban, is a big part of why distillate margins ran to records.

UAE fills the gap

UAE crude output hit 4.1 million bpd in June, a record and nearly double its March level, after the country left OPEC effective May 1. That new supply is one reason crude has not gotten away despite the Hormuz scare. It does little for diesel, though, where the tightness is in refining and shipping, not crude.

What to watch

Whether Hormuz traffic keeps recovering or stalls again on the next strike, which is what drove the $4 move. Diesel is the tighter market right now. With Russian exports off and margins at records, US distillate buyers could see rack prices hold firm even if Brent eases. Delta said its fuel bill jumped sharply this quarter and its refinery stake only partly offset the hit, which is the kind of squeeze a wide crack spread puts on anyone hauling a lot of diesel. Watch the crack, not just the crude.