According to a report by the American freight transportation industry media 'Transport Topics' on August 26, the supply of diesel in the United States has dropped to its lowest level since records began. As the heating season and agricultural harvest season approach, there is pressure for further increases in the price of this "main fuel" for the global economy.
Data released by the U.S. Energy Information Administration on August 26 shows that as of the week ending August 21, U.S. distillate fuel oil (mainly diesel) inventories amounted to 103.4 million barrels. Based on data that dates back to the early 1980s, this level of inventory is “never been as low” during previous years.
This inventory level is approximately 14% lower than the average for the same period five years ago, and 9.5% lower than the previous period of 114.2 million barrels.
However, global demand for diesel typically peaks around October, when the winter heating season in the Northern Hemisphere coincides with the harvest season, while the Southern Hemisphere is in the planting season. With inventories already at a critical level, rising demand could further drive up fuel prices and intensify inflation pressures driven by energy consumption.
The US-initiated conflict between the United States and Iran is one of the main reasons for this situation. This conflict has nearly led to a zero output of refined oil products passing through the Strait of Hormuz, causing a significant impact on the energy market.
It gets even worse when Russia, an important diesel exporter, suspends diesel exports due to Ukrainian drone attacks on its refineries. Moscow is considering extending the export ban for another month, which will further reduce supplies to trading partners.
Currently, the retail price of diesel in the United States has exceeded $5.60 per gallon, approaching the highest level since the outbreak of the US-Iran conflict. It is just less than 20 cents away from the historical record set in 2022.
