Diesel crisis ripples through economy

I own an RV. And no, it's not one of those cool camper vans, it's a big one, kind of absurdly big.

My relationship with the RV is, well, complicated. My wife isn't all that enthused about it, and she certainly won't drive the thing. Most of the time it sits in the barn and from an economic point of view it simply cannot be remotely justified on any level, given my current lifestyle of adult kids spread out all over the Midwest and very busy career. It is, however, so pretty, but for a guy who gives financial advice for a living, it's kind of my hidden shame.

I took it out last weekend to Brown County. Three out of the four kids met us there, along with their spouses, and honestly, we had a great time, for one night. We'll also use it for a tailgate party at Ohio State and for the Purdue-IU game in November. My wife will sleep in a hotel. I think you're getting the picture.

The other day when I pulled it out to go to Brown County, the fuel tank was half full. So, I decided to fill up on the way down. I pulled into the Flying J, hooked it up to the pump and went inside looking for marshmallows. It takes a long time to fill an RV fuel tank, and when I came out my credit card had capped the transaction at $175. I thought that should be enough and got in to go. When I turned on the motor the fuel gauge had moved a little under a quarter tank. Shocked, I glanced at the fuel price board as I was pulling out. $6.09 a gallon for diesel. Completely outrageous.

So, what do indulgent toys that run on diesel have to do with markets and the economy? As it turns out, a lot, and none of it is good right now.

I know gasoline at $3.50 is annoying, but most of us will just buckle down and endure. But the U.S. economy actually runs on diesel fuel. Diesel fuel moves trucks, trains and is critical to agriculture, and right now diesel prices are approaching a crisis level.

This unfolding diesel crisis has multiple drivers and is not just an oil-price story. As of mid-September 2026, U.S. retail diesel has set new records near $5.82--$5.90 a gallon. Diesel prices have risen far faster than gasoline or crude because the shortage is based not only on crude oil supplies, but also in the processing capacity used to refine fuel products used in trucks, farms, construction, and (soon) winter heating in Europe.

The two overlapping wars are the main drivers. The U.S.--Israel conflict with Iran has disrupted Persian Gulf exports as Iranian attacks have taken some refining capacity offline. This means even when shipping lanes in the region are operating (right now they are not) crude oil shipments can partially recover, but refined products like diesel remain constrained. Middle East diesel, as well as jet-fuel exports, remain well below pre-war levels because damaged refineries take longer to restart and because some pipeline workarounds that bypass shipping lanes move crude oil only.

At the same time, Ukrainian drone strikes have slashed Russian refinery throughput to multi-decade lows. Russia has banned diesel exports through at least September 30 and has signaled longer restrictions. The result is global diesel exports fell about 35 percent year-on-year in July, and recent intel out of an industry conference in Singapore indicated spare refining capacity globally is nearly gone.

U.S. refiners have responded by running at 97 percent-plus utilization and delaying maintenance, resulting in record July diesel production. Even so, national stocks sit well below average, and are shockingly low in the East Coast market.

The diesel crack spread, the refining margin over crude, has spiked above $100 a barrel, a sign of stress in the production system rather than simply a reflection of higher crude oil prices.

Three-quarters of U.S. diesel goes to transportation, and transportation impacts just about everything. Higher trucking costs feed into grocery, construction, and manufactured-goods prices. To make matters worse, the approaching European winter heating season could keep prices elevated for months. There seem to be no easy answers for this problem.

Diesel is the workhorse fuel of the physical economy, and persistent higher prices have the capacity to increase general prices on products across the board. At a time when interest rate markets are struggling to reconcile general inflation pressures in the economy, and higher interest rates are beginning to impact stock market behavior, diesel fuel prices could be the precursor to a challenging fall investing season.

So, for now, my hidden shame will continue to sleep in the barn. She's too expensive to run, and I'm just hoping prices cool off before the Ohio State-Northwestern game in mid-November, or its going cost me $400 just to get there and back.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. This material may contain forward looking statements; there are no guarantees that these outcomes will come to pass.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.