Refiners are prioritizing diesel production due to near-record margins, leading to a squeeze on gasoline supplies in the US. This global imbalance is driven by robust demand for diesel in sectors like shipping and manufacturing, coupled with constrained supply from Russian exports and underinvestment in refining capacity. As a result, diesel prices have surged, impacting transportation costs across various industries.

The situation is exacerbated by a lack of available gasoline blending components, as refiners focus on maximizing diesel output. Analysts suggest that this trend could persist through the summer, contributing to higher fuel costs for consumers and businesses alike. The International Energy Agency has highlighted the tight diesel market, noting that it's a significant factor in current energy price inflation.

The disconnect between diesel and gasoline prices, with diesel trading at a premium not seen in years, underscores the depth of the supply crunch. While some expect refinery maintenance season to ease the pressure, the underlying supply constraints and strong demand are likely to keep the diesel market tight for the foreseeable future, affecting everything from truck freight to agricultural operations and potentially impacting the cost of goods throughout the economy. The US is experiencing this acutely.