Why the Diesel Fuel Crisis Has No Easy Solutions

Diesel prices are hitting record highs just as [music] the midterm elections are coming up. This chart shows that wholesale diesel prices are up about 60% [music] since the start of the year on conflict. Up more than oil, which is up about 30%. [music] That translates to retail diesel prices of around $6.40 a gallon. More oil has been flowing [music] through the Strait of Hormuz recently and the prices of oil and diesel have moderated. But fuel prices are likely to stay elevated. [music] That's because the conflict in the Middle East and drone strikes in Russia have cut off refining capacity, limiting the world's ability to process oil into fuels like gasoline and diesel. A US [music] export ban on diesel could temporarily bring prices down, but eventually it could push up the price of other fuels [music] like gasoline or jet fuel. There are two other potential solutions that could be more effective. One is releasing Europe's big stockpile of fuel products. [music] As of July, Europe's governments held about 264 million barrels, including diesel. >> [music] >> On October 2nd, G7 economies agreed to release 100 million barrels of crude oil and fuel from their emergency [music] stocks. That should ease prices in the short term, but it isn't a lasting solution. The other option is [music] to convince China to ramp up refining. China is the only country that still [music] has plenty of spare refining capacity. Given the ongoing conflicts, every country's objective [music] is to make sure they have enough fuel supply at home. Unfortunately for the US, the effective solutions [music] to the diesel crisis are out of its immediate reach.