Wholesale diesel prices have climbed to roughly $180 a barrel on world markets, hitting what Tom Kloza, Chief Energy Advisor for Gulf Oil, called "insane" levels and already exceeding the peaks many analysts expected after Russia's invasion of Ukraine. Speaking on FreightWaves Today, Kloza warned that a tropical storm threatening Gulf Coast refining infrastructure could push prices above $200 a barrel — "apocalyptic numbers" — if a hurricane disrupts refining.
Record exports and a thin domestic buffer
The warning comes as fresh Energy Department data showed the United States exported nearly 2 million barrels of distillate last week — a record — on top of domestic consumption running close to 3.5 million barrels a day, according to FreightWaves. With refinery margins offering roughly $90 more per barrel of diesel than the cost of crude, itself trading in the mid-$80s, U.S. refiners are running hard. But maximum domestic output is capped near 5.3 million barrels a day, leaving little buffer if demand spikes or unplanned outages hit, the report said.
| Metric | Latest figure | Source |
|---|---|---|
| Wholesale diesel price | ~$180 per barrel | Tom Kloza, Gulf Oil |
| Record US distillate exports | ~2 million barrels last week | Energy Department |
| US diesel consumption | ~3.5 million barrels/day | Energy Department |
| Diesel refining margin | ~$90 per barrel over crude | FreightWaves |
| Crude oil price | mid-$80s per barrel | FreightWaves |
| Maximum US diesel output | ~5.3 million barrels/day | FreightWaves |
| Global refining capacity gap | 7–9 million barrels/day | Tom Kloza |
Drone strikes rattle refining infrastructure
Kloza pointed to a rapidly expanding threat he said the media has largely overlooked: drone strikes on refining infrastructure. In the span of a single week, attacks knocked out refining capacity in Russia, Saudi Arabia, and Libya. Drones costing tens of thousands of dollars can destroy billions of dollars of petroleum infrastructure because refineries are, in his words, essentially powder kegs.
"For the first 48 years of my career, I never heard about a refinery being attacked with drones. And in the last 2 years, it's been happening in spades," Kloza said.
Kloza warned that the tactic is now a permanent fixture of the energy security landscape.
A structurally short global refining system
Global refining capacity is already short by an estimated 7 to 9 million barrels a day, according to Kloza, a gap worsened by Venezuela's long decline and Latin America's growing dependence on U.S. diesel supply. That makes the U.S. Gulf Coast what Kloza called "the cleanest dirty shirt" for sourcing distillate — a position that benefits the U.S. trade balance but concentrates global price risk on a narrow stretch of coastline.
Export curbs and political pressure
Kloza said the Trump administration could raise the specter of diesel export curbs to cool prices if the market overheats, noting that presidential commentary on social media has already helped keep crude oil below $100 a barrel. He cautioned, however, that actually imposing export restrictions would be counterproductive. "That would be a horrible policy outcome," he said, because suppressing domestic prices would discourage refinery investment at exactly the wrong time.
Fuel surcharge mismatch
The interview also surfaced a structural distortion in how fuel surcharges are calculated, according to Kloza and FreightWaves founder Craig Fuller. Government-linked fuel surcharges are indexed to EIA retail diesel prices, yet only about 2% of large fleets actually pay retail; the vast majority buy at cost-plus or negotiated rack-minus arrangements. That means shippers tied to EIA-based surcharge formulas may be overpaying relative to what carriers actually spend at the pump. Consolidation among the three dominant truck-stop chains has amplified that spread, giving major fueling networks significant pricing power over the posted numbers that underpin those surcharge calculations.
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