Comment dated Thursday, March 7, 2026: Pre-Dawn

Ultra Low Sulfur Diesel (USLD) fuel contracts of 42,000 gallons delivered to New York Harbor destinations have gapped higher as a direct result of the Iranian “closure” of the Straits of Hormuz, although it is the insurance brokers that probably had more to do with halting shipping of crude oil and derivations. By reports the Iranian Navy has been crippled and most of the Iranian military capability to shoot at shipping has been disabled at this point. The diesel market’s upward spike is unlikely to end while assessment of future conditions among the oil producing nations of the Middle East continues. There are apparently discussions of protective escorts and alternative insurance guarantees sponsored by the U.S. which may help alleviate some of the pressure, but few vessel owners are likely to venture into the area until there is some proof of stability.

Crude oil is 50% of the diesel price, the balance is refining, transport, and taxes. As an economic canary similar to copper prices, another current implication of lower fuel prices is global economic slowing.