The oil market has remained complacent for months amid the worst disruption in global supply, with crude oil futures rarely topping $100 per barrel over the six months in which tanker traffic at the Strait of Hormuz is a trickle compared to pre-war levels.
While market participants have been putting too much hope of a resolution of the conflict in their bets on future crude prices, product supply of the fuel of the economies – diesel – has been shrinking.
So much has the diesel market tightened in recent months that the diesel crack spread, the pricing difference between a barrel of crude oil and the diesel refined from it, hit record highs in both the United States and Europe this week.
The crude oil market shows traders' expectations of near-term supply, but the diesel markets are flashing the very real physical tightness of the petroleum product whose consumption has yet to rise this year and whose availability and prices drive economies and inflation.
The diesel crack spread in the United States hit triple digits this week, for the first time ever. The premium over crude prices jumped to as high as $102 per barrel on Monday, before easing slightly to about $100 a barrel on Tuesday.

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