Market Update: U.S. Diesel Shortage

You have probably heard by now that there is a shortage of diesel in the U.S. What does that mean? Should we be concerned?

It is true that U.S. diesel inventories are very low. This has been the case all year, as diesel stocks in the U.S. started the year below historical levels and have remained at minimal levels all year. Diesel markets have been very volatile and exceptionally challenging for industry participants who refine, transport, and store fuel for customers. The Russian invasion of Ukraine in February really threw energy markets into unprecedented times, adding even more uncertainty to a market that was already somewhat stressed with supply not keeping up with demand. And for those who heat their homes with heating oil, low inventories and talk of shortages can be particularly unsettling as we head into winter.

When we talk about U.S. diesel shortages, not all regions of the U.S. are created equal. The Northeast is experiencing the most difficulty, as they import most of their fuel from other places, which is particularly challenging in volatile markets. We are fortunate here in the Midwest to be much more balanced with respect to local supply and demand, so we have not had the same struggles with supply security in our region. In fact, the Midwest often ships fuel over to the Northeast when we have excess product and the economics are favorable to do so. While we have had some supply issues this fall with local refinery maintenance and are not completely immune to the challenges presented by markets this year, overall, the Midwest is in much better shape with regards to diesel supply than some other parts of our country.

In the event of a supply shortage that impacted Michigan directly, Crystal Flash is always ready to respond to get our customers the fuel that they need. We maintain active access to many different supply terminals and have relationships with numerous suppliers, and we have the resources — including storage, trucks, and a great team of professional drivers – to help make sure that we can deliver fuel where and when it is needed. Rest assured, Crystal Flash will do what it takes to bring the energy that fuels our customers’ success!