
Portfolio manager of Alfa Capital Management Company Dmitry Scriabin explained the reasons for the record rise in diesel prices in the USA
The record increase in diesel fuel prices in the United States, exceeding $6.5 per gallon, is caused by a supply shortage, low distillate inventories, a ban on exports from the Russian Federation and a seasonal peak in demand associated with the harvest campaign.
AI-generated summary
The rise in diesel prices in the US is caused by a supply shock and structural problems in the petroleum products market.
The rise in diesel prices in the US is due to low inventories and seasonal factors. The record rise in price was explained to Lenta.ru by the portfolio manager of Alfa Capital Management Company Dmitry Scriabin.
At the end of September, record-breaking diesel prices in the United States had already exceeded $6.5 per gallon (3.79 liters) and in California - $8.44, although at the beginning of September they were about a dollar lower. Agricultural enterprises, as well as those engaged in the retail trade and airlines have already encountered difficulties, which has prompted authorities to consider banning the export of this fuel.
“This is essentially a supply shock. A key factor is the closure of the Strait of Hormuz (about 20 percent of the world's oil) since late February as a result of the conflict over Iran, which has disrupted not only the supply of crude oil, but also the export of finished petroleum products from large refineries in Saudi Arabia and other Gulf countries. Moreover, the volumes of crude oil exports have recovered, which cannot be said about the volumes of supplies of petroleum products from the Gulf countries - the volumes are still three times lower than pre-crisis levels. One of the reasons is damage to the oil refinery during hostilities,” explained Scriabin.
In addition, the ban on the export of diesel and gasoline from Russia has significantly increased the supply shortage in the market. This decision was influenced by low US distillate inventories (which were about 13 percent below the five-year average) and seasonal factors. For California, where prices are currently highest, the situation is exacerbated by the state's structural isolation - there are no pipelines from other regions, higher taxes and weaker competition among refineries.
“In the short term, high prices are likely to persist, since the global structural deficit in refining is also influenced by a seasonal factor: demand for diesel traditionally peaks in September-October due to the harvesting campaign and associated cargo transportation. But even after a possible normalization of global flows, they will not go away: a full return to pre-crisis levels ($3-4 per gallon) is unlikely in the short term, even if the geopolitical situation improves,” the expert said.
AI outlook — possibilities, not facts
Continued high diesel prices in the short term
Likely · Within months

Slovakia's Minister of Economy Denisa Sakova announced the country's plans to stop importing Russian oil by the end of 2027. Currently, supplies are carried out through the Druzhba pipeline for the needs of the Slovnaft refinery.

World oil prices exceeded $105 per barrel, showing an increase of 4.83%. Experts attribute the rise in price to increased attacks on tankers in the Strait of Hormuz and fears of a supply shortage in the global market.

World prices for Brent oil rose by almost 5%, surpassing $105 per barrel for the first time since mid-September. The growth was recorded during trading on Thursday.

Indian refineries have reduced purchases of Russian oil to a minimum since March 2022 due to almost disappeared discounts, reorienting themselves to supplies from the Persian Gulf countries.

European underground gas storage facilities have reached 73% capacity, though injection rates slow as temperatures drop. Current reserves sit at their lowest level for this date since 2011, raising concerns ahead of the winter season.

Commercial vessel transit through the Strait of Hormuz hit its lowest level since July 23 this week amid escalating attacks on tankers, with average daily oil transit dropping 27% from September peak levels according to Kpler data.