Global demand recovery and new applications, combined with declines in refining capacity and inventories, are driving distillate (diesel and heating oil) prices to record highs. U.S. retail prices have risen from a national average of $3.50/gallon at the beginning of 2022 to over $5.50 in May.

  • Global demand recovery and new applications, coupled with declines in refining capacity and global inventories, are driving distillate (diesel and heating oil) prices to record highs. U.S. retail prices have risen from a national average of $3.50/gallon at the beginning of 2022 to over $5.50 in May.
  • Distillate, in its primary form as diesel, is the bedrock fuel for rail and truck freight movement, most agricultural machinery, and electricity production in select markets such as Hawaii. There are no substitutes available.
  • With the IMO2020 desulfurization regulations, distillate consumption has expanded in maritime usage.
  • With the Russian war against Ukraine, Russian distillate exports, especially to Europe, have declined substantially as embargoes loom. In addition, Russia’s war has caused more of its distillate to be used in its land-based military equipment.
Overview of Tight Global Distillate Markets — figure 2
Fig. 2 of 7 · Chart 2022-17 · Source: EPRINC
Overview of Tight Global Distillate Markets — figure 3
Fig. 3 of 7 · Chart 2022-17 · Source: EPRINC
Overview of Tight Global Distillate Markets — figure 4
Fig. 4 of 7 · Chart 2022-17 · Source: EPRINC
Overview of Tight Global Distillate Markets — figure 5
Fig. 5 of 7 · Chart 2022-17 · Source: EPRINC
Overview of Tight Global Distillate Markets — figure 6
Fig. 6 of 7 · Chart 2022-17 · Source: EPRINC
Overview of Tight Global Distillate Markets — figure 7
Fig. 7 of 7 · Chart 2022-17 · Source: EPRINC

From the EPRINC Chart of the Week archive.