The diesel market is facing a major supply shortage. The US diesel refining margin is up to a record $106/barrel, surpassing $100 for the first time. This is a key measure of how much refiners can potentially earn from turning a barrel of crude oil into diesel, with wider margins signaling tighter diesel supplies and higher refining profits. Diesel refining margins have more than tripled since February. By comparison, during the 2022 energy crisis, this metric peaked at ~$85/barrel. The surge reflects a severe shortage of global diesel supplies amid the Iran War. As a result, US diesel inventories are down to 103.4 million barrels, their lowest on record for this time of year, while retail diesel prices are up to $5.78 per gallon, just 4 cents from their all-time high set in June 2022. The global fuel shortage is becoming far more severe than the crude oil market alone suggests.(The Kobeissi Letter)