Although diesel prices are down from last summer’s highs, the U.S. diesel supply remains tight, and prices are expected to stay inflated.
- Prices of diesel have dropped by more than a dollar after the extreme high of $5.816 a gallon brought on last summer by Russia’s invasion of Ukraine.
- Although the prices have dropped from the high, it is expected to stay inflated as the U.S. diesel supply remains tight.
- U.S. distillate stocks, which include diesel, are at least 28 million barrels below the five-year average, according to data from the Energy Information Administration.
Why it’s important
Diesel prices are expected to remain inflated as the U.S. diesel supply remains tight.
Russia’s invasion of Ukraine brought many issues, including skyrocketing gas and diesel prices last year. Prices for both have dropped, but diesel is still high and not expected to drop due to the supply being tight.
Many factors caused the diesel supply to be low, including Russia’s invasion, U.S. refining maintenance, and other supply chain issues.
Many U.S. oil refineries are doing much-needed maintenance, limiting diesel supply. Many refineries needed maintenance in 2020 to continue operations, but it was deferred due to the pandemic.
Now as many pandemic-related issues have subsided, refineries are doing the work that needed to be done nearly three years ago, which is limiting diesel.
Another related factor is that many countries are trying not to take oil from Russia after the country invaded Ukraine. Russia was a main shipper of oil, and now many countries are eliminating what they take from the country, and what is taken has high shipping costs.
Although the diesel market continues to face supply issues, experts say the prices will not exceed the extreme highs of last summer.