Diesel Margins Hit Record Width as Refiners Lock in Profit

The diesel shortage is being driven by uncertainty in the Strait of Hormuz and a Russian export ban, as refining margins reach record width. Alex Hodes, StoneX Director Energy Market Strategy, explains why the gap between the cost of crude and the price of diesel is as wide as it has ever been, and why that has made price swings so large. Russia has banned diesel exports to keep supply for domestic use, even after Europe allowed buyers to purchase diesel produced from Russian crude. Around a fifth of global energy product supply passes through the Strait of Hormuz, and uncertainty over those flows is prompting buyers to build precautionary stocks. Low Rhine River levels have made it hard to move diesel inland, creating a local shortage in Europe while supply sits in the Amsterdam, Rotterdam and Antwerp (ARA) hub. With refiners locking in margins at unprecedented levels, a 10% move in diesel now carries far more weight than the same move at lower prices. 0:00 Diesel Spread Never This Wide 0:39 Volatility Stings Traders 1:01 Hormuz Risk Hits Diesel Supply 1:36 Russia Halts Diesel Exports 2:20 Low Rhine Strands Diesel 2:35 Local Squeeze, Global Drivers Discover Actionable Energy Insights with StoneX Market Intelligence: https://shop.stonex.com/collections/energy?utm_source=youtube&utm_medium=social&utm_campaign=sxtv_guest_alex_hodes&utm_content=share Like and subscribe for more financial market insights. #Diesel #StoneX #AlexHodes #StraitOfHormuz --------- Like this video? Subscribe and turn on notifications so you don't miss any videos from StoneX: https://www.youtube.com/@StoneX_Official Visit https://www.stonex.com/en/insights/thought-leadership/?utm_source=youtube&utm_medium=social for insights, perspectives and thought leadership from StoneX's global network of experts. Visit our website: https://www.stonex.com?utm_source=youtube&utm_medium=social