Brent and WTI futures remain below $100 a barrel on Tuesday morning, partly suppressed by governments releasing strategic oil reserves into global markets. But the more serious issue is building downstream, where the Russia-Ukraine war, strikes against energy infrastructure, and continued disruptions around the Strait of Hormuz are fueling the refined-products "perfect storm" we have repeatedly warned about.
Oil extended gains this morning, with Brent trading around $91 a barrel after another vessel attack was reported near the Hormuz maritime chokepoint. President Trump also said he had no interest in extending the interim peace agreement with Iran, which expired Monday.
Diesel is now the biggest concern ahead of the Northern Hemisphere harvest. Rising fuel costs threaten to hit farmers, freight operators, and ultimately consumers through higher prices for food and goods. JPMorgan penned a note last week warning that a global food crisis could erupt as soon as next year (read here).
Back to diesel, the squeeze is being compounded by depleted inventories, with US diesel reserves near 23-year lows and European stockpiles approaching levels last seen during the 2022 energy crisis.
A chart we published overnight went viral after showing the front-month US diesel crack spread (the NYMEX one-month heatin
