The Shocking Reason Gas Prices Can’t Come Down Anytime Soon | Rory Johnston

Global oil markets remain in a precarious state of supply deficit despite a partial recovery in crude transit through the Strait of Hormuz. Rory Johnston, founder of The Commodity Context, explains that current price volatility stems from a structural lack of inventory buffers, requiring a sustained period of surplus to normalize. Diesel markets face even greater pressure due to regional refinery damage and the loss of Russian exports, pushing crack spreads to record highs. While the U.S. faces political pressure to implement a diesel export ban, such a move would likely backfire by destroying domestic refining incentives and exacerbating global shortages. Instead, China’s potential to increase refined product exports serves as the most significant variable for stabilizing the global distillate market. Ultimately, high energy prices act as a blunt economic force, likely necessitating continued central bank intervention to curb demand and restore market balance.