Global fuel supply squeeze

What happened: Diesel prices surged in early August due to refinery disruptions, with attacks on Russian and Saudi facilities exacerbating a global supply crunch. Phillips 66's earnings soared on strong refining margins, while analysts and Big Oil warned of dangerously low fuel stocks. Russia's diesel exports hit a multi-year low of 80,000 bpd, and Goldman Sachs' commodities guru highlighted diesel as the epicenter of the fuel supply squeeze.

Market impact: The global diesel market's precarious state is driving up prices, affecting industries reliant on diesel, such as shipping, construction, and transportation. US refiners are benefiting from strong margins, while Europe faces a twin diesel and natural gas crunch heading into winter. Global fuel stocks are running low, with Big Oil warning of potential shortages.

What to watch next: In the coming weeks, monitor US distillate exports and Russia's diesel export restrictions. Keep an eye on Phillips 66's third-quarter earnings, due in late October, for further insights into refining margins. Additionally, watch for any developments in the Russia-Ukraine conflict and the Iran crisis, which could impact global fuel supply dynamics.