Diesel at $6.35 a Gallon: The Refinery Squeeze Driving Records While Gasoline Lags

Diesel has blown past its 2022 record of $5.81 a gallon, touched about $6.50 in recent weeks, and now sits near $6.35 — while gasoline sits roughly 70 cents below its own 2022 high. That divergence, according to GasBuddy analyst Patrick De Haan, has almost nothing to do with the price of oil, and everything to do with refining capacity the world has quietly lost.

De Haan, whose firm tracks pump prices at roughly 150,000 stations across the US and Canada, called this the most volatile stretch he has seen since he started tracking prices in 2009. Not one dramatic spike. Volatility usually arrives with a hurricane or geopolitical flare-up and fades in a week or two. This run started in March, cooled in June and July, roared back in August and September, and has never settled.

What actually separates diesel from gasoline?

The 2022 run-up pushed both fuels to records together. This time they've decoupled. De Haan's core point: gasoline, diesel, jet fuel, and crude are different products with different economics, and a barrel of oil is nearly worthless until a refinery turns it into something usable.

Not all crude is alike, either. He likened it to the oil aisle at an auto parts store — no single weight or grade. Heavier crude, the kind Canada, Venezuela, Iran and Russia produce, yields more diesel. Iran produces roughly 55 percent heavy crude, and refineries generally can't simply swap one crude type for another. When heavy barrels or the plants that process them come under pressure, diesel feels it first.

The structural backdrop compounds the squeeze. Diesel has run above gasoline for about two decades, a gap that widened after the ultra-low-sulfur diesel specification took hold around 2006. The US has also lost its crown as the world's largest refiner, overtaken by China in the last year — and China has throttled some refining output to protect its own crude access and strategic reserves.

What did Russia do to the diesel market?

The fast-moving shock: Russia pulling back on diesel exports since July. Russia produces about 10 percent of the world's diesel. The cause is the Ukrainian drone campaign against Russian refineries, which began last October and grew far more effective as drone technology advanced, degrading Russia's refining sector to the point of domestic fuel rationing.

The market now carries two pressures at once. Strait of Hormuz tensions and Iran lifted crude earlier in the year; refining losses sent diesel specifically into record territory. The oil disruption moved the base price. The refining capacity losses did the rest.

How does the pump price get built?

The foundation is the NYMEX ultra-low-sulfur diesel contract — essentially a delivered New York Harbor barge price, no taxes. From there, regional refining balances take over, and spreads run 40 to 60 cents a gallon depending on whether you're fueling in New York, Michigan, Florida, Texas or California.

Geography drives the gaps. The Colonial Pipeline, which De Haan likened to an aorta running from Houston through the mid-Atlantic to New York, means markets along its path price off the Gulf Coast — usually among the cheapest places to buy. But that export-capable coast swings to premium when Europe scrambles for diesel it can no longer get from Russia. California runs expensive on policy-narrowed capacity and high taxes, and the Great Lakes recently jumped on localized refining trouble, since those plants lean on Western Canadian crude.

What does this change for carriers and surcharges?

The rack — the wholesale level — historically reset once a day, around 5 or 6 pm. In March and April, De Haan said, the rack moved intraday, and the difference between filling a tank truck at 5:55 and 6:05 could run 50 to 80 cents a gallon at wholesale. Retail lags one to three days on the way up and stays sticky on the way down; underground tanks turn over every two to four days on average.

That strains fuel surcharges pegged to the Department of Energy's weekly national average. One number, published once a week, cannot track a market where regional spreads run half a dollar. A carrier running the West Coast, a Great Lakes refining hiccup, or an export-premium Gulf Coast pays well above the index — and that gap comes straight out of margin.

De Haan was measured on blame. Oil companies are price takers, not price makers; in January and February crude sat at $50-60 a barrel and producers weren't thriving. And forecasts for 2026 that predicted a crude glut ended abruptly on March 1, with no quick return to a well-supplied market in sight. For carriers, the takeaway is blunt: plan fuel cost around refining capacity and regional spreads, not the headline crude number — because diesel now moves on different, more fragile levers than the oil price everyone watches.