Refining Bottleneck Sends Diesel Prices to Record High

Rising gasoline and diesel prices are costing Americans nearly $750 million more than a year ago, driven by a complex convergence of geopolitical conflict and severe refining constraints. Patrick De Haan, head of petroleum analysis at GasBuddy, explains that Ukrainian attacks on Russian refineries have specifically tightened global diesel supplies, while Middle Eastern production remains bottlenecked by logistical hurdles like the Strait of Hormuz. Domestically, U.S. refineries are operating at a near-record 98% capacity, leaving almost no "optionality" to increase output or pivot between fuel types. This infrastructure crisis is exacerbated by the loss of several refineries during the pandemic and the seasonal commencement of essential maintenance turnarounds. While crude oil prices remain below historic peaks, the lack of refining bandwidth—rather than a shortage of raw oil—serves as the primary driver for record-high fuel costs, a structural issue that cannot be resolved through short-term policy shifts or increased oil production alone.