The New York Harbor ultra-low sulfur diesel crack spread reached $110.40 a barrel on September 11, 2026—the first time the U.S. diesel crack has surpassed $100 per barrel. The spread, which measures the difference between crude oil and refined fuel prices, reflects refiner earnings and signals severe constraints in global refined product markets.
Brent crude has traded near $95 a barrel and West Texas Intermediate near $90, broadly flat since January. Yet U.S. retail diesel has set an all-time high, approaching $6 a gallon—roughly $28 cheaper crude than mid-June 2022, when the diesel crack spread was only $64 to $73.
Three factors converged to tighten refined product markets. Middle East conflict involving the United States, Israel and Iran disrupted traffic through the Strait of Hormuz and damaged Persian Gulf refining assets. Refined products move on smaller, specialized vessels with less spare capacity to absorb disruptions than the large tanker fleet used for crude oil.
Ukrainian drone strikes disabled a significant portion of Russian refining capacity. Moscow responded with an outright ban on diesel exports to protect its domestic market, removing between 0.8 and 1.0 million barrels per day of diesel from global trade.
Middle distillates—diesel and heating oil—were disproportionately affected. The facilities knocked offline were primarily geared toward diesel and jet fuel production rather than gasoline. Vitol Group chief executive Russell Hardy estimates total lost refined product exports from both regions at approximately 4 million barrels per day, split evenly between the Middle East and Russia.
U.S. refiners shifted output to chase wider distillate margins, but the redirection proved insufficient to meet demand. The Energy Information Administration reports U.S. distillate inventories plummeted to 14 percent below the five-year seasonal average, reaching the lowest seasonal level on record.
Most U.S. refiners already operate at or near their practical limits. Even with refinery runs at historic highs, global supply disruptions and foreign demand drain inventories faster than domestic production can replenish them.
