The disruptions in diesel exports from the Middle East and Russia, along with ongoing attacks on Ukrainian refineries, have pushed diesel cracks to record highs this week:
This week, the ICE gasoil crack, which shows the price difference between a barrel of crude oil and the diesel refined from it, hit a record high of $79 per barrel. At the same time, diesel cracks in the United States are trading well above $100 per barrel:
Moreover, the tightness in the diesel market is evident as the market structure shows that prompt contracts are trading higher than those further out in time:
According to ING's commodities strategists, disruptions to Middle Eastern and Russian diesel exports, along with the seasonal demand increase, are likely to keep cracks highly elevated and volatile:
