U.S. diesel crack tops $100 per barrel amid global supply strains

U.S. diesel crack, the margin between diesel futures and crude oil futures, surged to $102.20 a barrel on Monday, the first time it has exceeded $100. This spike reflects heightened supply pressures linked to the wars in Iran and Ukraine, which have already reduced global refinery crude throughput by about 5 million barrels per day from a year earlier, according to the International Energy Agency. The crack was trading at $99.82 a barrel, a 2.4% increase from the previous Friday, and has set new intraday records in five of the past six trading days.

Fresh attacks on Middle Eastern refineries have added to existing disruptions, raising worries about diesel availability for farmers during the harvest season in the northern hemisphere and planting season in the southern hemisphere. Beyond agriculture, higher diesel costs could affect manufacturing, heavy transport, and power generation worldwide. Ongoing tensions and potential U.S. actions against Chinese imports of Iranian oil could further tighten the market.