Diesel Crunch Deepens as Houthi Strikes on Yanbu Keep Brent Above $105
Brent held above $105 a barrel on renewed Houthi attacks on Saudi Arabia's Yanbu export terminal, while the refined-products market tightened further as Russian and Middle East refinery outages kept global diesel supplies short and pushed US pump prices to a record.
Brent crude traded at $105.65 a barrel on Thursday, up from roughly $102 at the start of the week, while West Texas Intermediate slipped to $93.11 from about $98, leaving the spread between the two benchmarks at its widest of the crisis. The divergence reflects a market pricing Atlantic-basin supply relief rather than a global shortage. Yemen's Houthi movement said it had fired missiles and drones at Saudi targets including the Yanbu Red Sea port, now the kingdom's main crude outlet. Talks between Washington and Tehran over reopening the Strait of Hormuz have produced no agreement, and despite higher Saudi loadings there is still no normal tanker traffic through the strait.
The products market is tighter than crude. IEA data showed global refinery throughput reached a summer peak of 81.4 million bpd in August, up 960,000 bpd on the month, but that was still 4.2 million bpd below a year earlier, with losses concentrated in the Middle East, Russia and Asian crude-importing economies. Russia has banned diesel exports through the end of September and is expected to extend the restriction into October. Phillips 66 executives have estimated that roughly 7 million bpd of refining capacity in Asia and the Middle East plus another 1.4 million bpd in Russia are offline, and only about 1 million bpd of the outbound flows through Hormuz is refined product rather than crude.
US fuel markets are absorbing the imbalance. The national average diesel price hit a record $6.52 per gallon, and European gasoil's premium over Brent has reached a record near $95 a barrel. The administration floated and then backed away from a 90-day diesel export ban; Energy Secretary Chris Wright argued that blocking exports would force refiners to cut runs and push gasoline and jet-fuel prices higher. Industry groups including API and AFPM noted that US refineries produce about 5.3 million bpd of distillate against domestic demand of roughly 3.6 million bpd, so restricting exports would remove storage outlets rather than add supply.
US inventory data show the same split. The EIA reported commercial crude stocks rose 3 million barrels to 426.4 million barrels in the week ended September 18 against expectations of a draw, while distillate inventories fell 428,000 barrels to 107.4 million barrels. The Strategic Petroleum Reserve has drifted toward 285 million barrels, leaving less of a cushion behind the commercial system. Crude is building; products are not, which is why flat price and product cracks can move in opposite directions in the same week.