Breaking

Diesel Futures Hit Record Highs as Structural Supply Pressures Mount

Ultra-low sulfur diesel futures on the CME reached effectively the highest price on record Monday, surpassing the 2008 spike and nearly matching the brief peak following Russia's invasion of Ukraine. The heating oil spot price at New York Harbor, the benchmark middle-distillate contract, climbed to $4.72 per gallon — the highest level in five years. According to FreightWaves editor-at-large John Kingston, unlike previous price spikes, this surge has structural backing that could sustain elevated prices for months. Ukrainian drone strikes on Russian refineries have taken over 1 million barrels a day of refining capacity offline. Russian refineries were specifically oriented toward diesel production given the heavier crude slate from Russian fields. Additionally, ongoing disruptions at the Strait of Hormuz continue to pressure global supplies. Tanker tracking firms such as Kepler dispute optimistic government estimates of oil flows through the strait, raising questions about reload capacity. For fleets and shippers, the critical issue remains how long elevated prices persist and whether fuel surcharges adequately cover costs, particularly on empty miles.