Some claims making the rounds on social media start with an observation that is basically correct: crude oil was more expensive after Russia invaded Ukraine in 2022 than it is today, yet diesel prices are now higher. The conclusion often attached to that comparison is that refiners must be gouging consumers. It sounds plausible because crude oil is the main raw material used to make diesel. But it leaves out the critical part of the market that has become the real bottleneck: refining.
As of September 20, AAA put the national average diesel price at about $6.50 a gallon, a nominal record. California was above $8.40, and a handful of stations have even displayed $9.999, the maximum price some pumps can show. Meanwhile, Brent crude is trading well below the inflation-adjusted peaks reached during previous oil crises. So, the basic question behind the claims is fair: If crude is not at a record, why is diesel?
The answer is that crude oil and diesel are related, but they are not interchangeable. Crude is an input. Diesel is a manufactured product. Between the wellhead and the fuel pump sits the refining system, and right now the world has a shortage of available diesel relative to demand. That allows diesel prices to rise even if crude prices stabilize or fall.
The Refining Margin
One way to see the pressure in the diesel market is through the diesel crack spread, which measures the difference between the market value of diesel and the crude oil used to produce it. That spread is sometimes described loosely as a refinery margin, but it should not be confused with a simple markup that refiners can set at will. It is determined by market prices for crude oil and refined products, and it can widen sharply when diesel becomes scarce relative to crude.
In mid-August, the U.S. diesel crack spread briefly topped $100 per barrel for the first time, a record. Asian diesel refining margins recently rose above $87 per barrel, compared with roughly $22 before the current Middle East conflict, according to Reuters. Those extraordinary spreads certainly mean refiners that are operating reliably can earn much more money.
But they are also evidence that the market value of diesel has risen far faster than the value of crude because refined-product supply has become unusually tight. A high crack spread, by itself, does not tell us whether the cause is manipulation, deliberate withholding, refinery outages, export disruptions, or some combination of supply and demand.
That distinction is why comparing today’s crude price with the 2022 crude price can be misleading. If crude falls by $10 per barrel while the diesel crack spread rises by $20, the raw material has become cheaper but the finished product can still become more expensive.
To argue that the wider spread indicates gouging, you would need additional evidence that refiners were deliberately restricting available production or coordinating prices. In the current market, the opposite is more evident: U.S. refineries have been running at very high utilization rates while global diesel supplies have been disrupted by refinery outages, war, and export constraints.
Why Diesel Is So Tight
Several disruptions have hit diesel supply at the same time. Ukrainian drone attacks have forced major Russian refineries to reduce output or shut units, and Russia has restricted some fuel exports to protect domestic supplies. Russia is normally one of the world’s largest exporters of diesel and gasoil, so losing part of that supply has effects far beyond Russia itself.
The Middle East has added another major shock. Refining and export infrastructure has been damaged or disrupted during the conflict with Iran, while shipping through the Strait of Hormuz has been severely constrained. Reuters estimates that disruptions involving Russia and the Persian Gulf have removed roughly 1.6 million barrels per day of diesel and gasoil exports compared with earlier this year. That is an enormous loss in a market that had little spare capacity to begin with.
U.S. refinery closures are part of the story too, but some of the claims circulating online overstate what happened. U.S. operable refining capacity reached nearly 19 million barrels per day at the start of 2020, then fell sharply during the pandemic. According to the Energy Information Administration, capacity stood at about 18.16 million barrels per day at the start of 2026 and about 18.03 million barrels per day by June after additional closures. That is a meaningful reduction from the 2020 peak and it leaves the system with less cushion when disruptions occur.
However, it is not accurate to say U.S. refining capacity simply fell every year after 2020 or that refiners collectively removed capacity in order to manufacture scarcity. EIA data show that capacity actually recovered somewhat between 2022 and 2025 as existing refineries expanded. Individual closures had different causes, including poor economics, conversions to renewable-fuel production, storm damage, aging facilities, and regional regulatory pressures.
The important point is that the data do not show a coordinated effort by refiners to withhold capacity and manufacture scarcity. But it is certainly true that the United States now has less refining capacity than it had at the 2020 peak, while the global market has simultaneously lost significant output elsewhere.
Are Refiners Gouging Consumers?
High refining margins unquestionably mean refiners are making a lot of money. Marathon Petroleum, Valero, and Phillips 66 collectively earned $12.6 billion in the second quarter as global fuel shortages widened margins, according to Reuters. That has understandably attracted attention, especially as consumers pay record prices.
But high profits do not by themselves demonstrate price gouging. The same price signal that hurts consumers and incentivizes conservation also tells refiners to run harder and produce more fuel. U.S. refineries have recently been operating near practical capacity, and distillate production has been strong.
One test of the claim that refiners are deliberately withholding production is whether substantial usable capacity is sitting idle. That is not what the current data show. Recent weekly EIA data put refinery utilization as high as 98%, near the upper end of the historical range. And through the first six months of 2026, refinery gross inputs were only 1.1% below the pre-COVID year of 2019.
That does not mean refinery closures are irrelevant. They reduced the margin for error. When Russian refineries are damaged, Middle Eastern exports are disrupted, or a U.S. refinery goes down unexpectedly, there are fewer spare facilities available to replace the lost barrels. That makes price spikes larger than they might have been in a system with more excess capacity.
Why Oil Can Fall While Diesel Stays High
Crude and refined products respond to different supply-and-demand balances. Oil prices can fall because crude inventories rise, demand weakens, or producers find new ways to move barrels around transportation bottlenecks. None of those developments automatically repairs a damaged refinery or creates additional diesel production.
That is the key to understanding today’s market. The world may have enough crude oil to keep Brent from returning to its highest historical levels, but it does not currently have enough readily available refining capacity and diesel exports to keep distillate prices from reaching records. The two markets can therefore move in opposite directions for extended periods.
There is a legitimate debate to be had about U.S. refining policy, the loss of domestic capacity, and whether the country should create stronger incentives to maintain or expand refining infrastructure. But the simple claim that lower crude prices combined with higher diesel prices proves gouging does not hold up. The refining system between the oil field and the fuel pump matters, and right now that is where the pressure is greatest.
Until damaged refineries return to service, global diesel exports recover, inventories rebuild, or demand weakens materially, diesel prices can remain painfully high even if crude oil prices move lower.
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