{"id":730,"date":"2026-10-25T03:13:36","date_gmt":"2026-10-25T03:13:36","guid":{"rendered":"https:\/\/engineersandeconomists.com\/?p=730"},"modified":"2026-10-25T03:29:38","modified_gmt":"2026-10-25T03:29:38","slug":"no-alternate-choice-but-high-diesel-prices","status":"publish","type":"post","link":"https:\/\/engineersandeconomists.com\/index.php\/2026\/10\/25\/no-alternate-choice-but-high-diesel-prices\/","title":{"rendered":"No Alternate Choice But High Diesel Prices"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

US Diesel prices have been rising rapidly in 2026 and are not showing any signs of slowing down. Europe is in even worse shape, reaching nearly $10\/gallon and their economic stress is showing up in the streets as violence is breaking out across France and the contagion threatens to spread across Europe. This has become a major midterm issue for the Republicans with the Democrats knocking President Trump on the high prices. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Diesel storage is near a record low in the US which is supporting Diesel prices. Storage dropped after Covid when oil prices reached a record low as prices went negative for the first time ever. Since then, diesel storage has struggled to bounce back but the country is not suffering a lack of diesel. We are suffering from a global commodity market that is driving up prices.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Refinery utilization has increased significantly over the past six years since the onset of Covid. The intersection of the red horizontal line and the blue vertical lines highlights October refinery utilization rates across multiple years to compare apples to apples as refinery run rates are cyclical. As shown above, current utilization is substantially higher than in previous years for this time of year and came close to reaching a record high in July 2026, the most recent month for which data is available.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

There are several reasons why diesel prices have skyrocketed. These high diesel prices are not from a lack of diesel. While distillate storage levels are low in the US, exports are near record high at 1.745 million barrels a day only being surpassed by 2017 levels. To put it another way, if we blocked exports for a month it would cause the 1.745 MMBPD of diesel exports to be trapped in the US. This would lead storage levels to leap by approximately 50 million barrels and would cause diesel prices to come back to normal.<\/p>\n\n\n\n

Some may say that refinery rates may collapse if we cannot export the excess diesel but they don’t realize that major refiners have deals to bring crude to their refineries. These take or pay deals would cost refineries money if they turned back the crude. There are also only so many barrels of crude that can be exported from the US. The major refineries would have to take that crude as export terminal volume would be full and storage tanks would hit their peak and several refiners do not have large storage tanks to hold volume.<\/p>\n\n\n\n

President Trump may be hesitant to restrict exports as this would hurt Brazil, Chile, Mexico and Europe which make up roughly half of diesel exports. This would cause political chaos and would push those countries to beef up their own refining capacity. <\/p>\n\n\n\n

Then there is the Russia\/Ukraine war. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Bloomberg by way of Postfactum <\/a>shows the Ukraine strikes on Russian assets by type. We can see that Ukraine began stepping up strikes on Russian assets significantly in mid 2025. These strikes have only increased as of late with Ukraine hitting a single refinery several times to block Russian exports. It has also been hitting docks in the black sea and export terminals in the Baltic. This does not even count European nations taking over shadow fleet vessels moving Russian crude. These attacks actually turned Russia into a net importer of diesel.<\/p>\n\n\n\n

The next big cause of high oil prices is the Iran war. This is the big one as the GCC was not able to export refined products due to Iran closing the Strait of Hormuz and then attacking Saudi’s East\/West pipeline and finally attacking the UAE’s export terminal that bypasses the strait. Iran continues to mine the Strait of Hormuz and is trying to prevent crude and refined product exports.<\/p>\n\n\n\n

All of this has been reiterated in the news, ad nauseum over the past 3 months. The question the average American voter should be asking is, “Was there another choice?”.<\/p>\n\n\n\n

Imagine a scenario where the US never bombed Iran. Iran mentioned that it had enough nuclear material to build 11 nuclear bombs<\/a>. Had they built a bomb they could choke off oil and gas to the rest of the world while they continued to sponsor terrorism abroad. Even if the nuclear bomb was not an issue, leaving an intact Iran would not be in the best interest of ordinary Americans as it would lead to high energy prices at a time of crisis.<\/p>\n\n\n\n

China has said that it will retake Taiwan in 2027. The US struggled to have enough interceptors to hold back Iran this year and has been mass producing cheaper missiles to fill up its inventories. Had China started its invasion of Taiwan and even parts of Japan and Korea that it claims as its own, the US would have struggled with both conflicts at once. Even if the country could have dealt with both Iran and China at the same time, Iran would have closed the strait causing chaos around the world at a time when China would be choking off critical technology to the US. This would have crippled the world economy.<\/p>\n\n\n\n

If the choice were to defend Taiwan and its massive and unique manufacturing of high end electronics while paying higher diesel prices, the average American voter would easily choose to beat back Iran right now and bring Russia to the negotiating table before China tries to take Taiwan in 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"

US Diesel prices have been rising rapidly in 2026 and are not showing any signs of slowing down. Europe is in even worse shape, reaching…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[4,8,5,7,1],"tags":[],"class_list":["post-730","post","type-post","status-publish","format-standard","hentry","category-asia-pacific","category-europe","category-middle-east-africa","category-north-america","category-uncategorized"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t