Refinery outages are keeping US diesel high even as crude eases to $92

Drivers paid more this weekend than the crude tape says they should. WTI was near $92 a barrel Friday, Brent around $104, both off a little on the week. The gap between those numbers and what people paid at the pump is refining. Units are down or running tight, and that shows up in product prices well before it shows up in crude.

Diesel margins

Diesel is the one to watch. Benzinga flagged the case that US diesel prices could stay high even if oil falls, because the shortage is in refining capacity rather than crude supply. That matters for anyone moving freight. If crude eases and diesel doesn't follow, your haulers keep paying and margins on delivered fuel stay thin.

Crude itself is elevated but not extreme by recent standards. WTI went above $145 in July 2008 and topped $120 after Russia invaded Ukraine in 2022, with Brent near $139. Today's $92 is high, up roughly 40 percent from last September, but crude isn't what's setting the pump price right now. Refining is.

Russian refinery strikes

Ukraine struck six Russian oil refineries and a weapons plant in one week, and the Ilsky refinery in the Krasnodar region halted operations after a drone attack. Russia isn't a direct US supplier at any scale, but refined product is a global market. Every barrel of Russian diesel or gasoline that doesn't get made has to come from somewhere else, which tightens the same product pool US buyers draw from. The strikes came despite Trump's call for a ceasefire, so there's little sign the pressure eases on its own.

Zawiya shutdown

Libya's National Oil Corporation shut a unit at the Zawiya refinery, the country's largest, after armed groups closed a valve on the Sharara crude pipeline. NOC put its losses at $95 million and said it's trying to route a crude shipment through the Mellitah or Es Sider terminals to keep the plant running. Libyan supply is chronically shaky, so this is one more piece of refining capacity offline while product is already tight.

What to watch

Whether diesel holds if crude keeps sliding. If WTI drifts lower and diesel stays firm, that confirms the squeeze is in refining capacity, and it's a cost problem for haulers and jobbers for a while yet. Watch whether the Ilsky and Zawiya units come back online, and whether Ukraine keeps hitting Russian refineries. More capacity offline could keep product prices firm even in a soft crude market.