Tankers wait at anchor in Muscat, Oman, unable to traverse the Strait of Hormuz
The diesel crisis
By shutting the Strait of Hormuz, Iran has cut exports of distillate-rich Middle Eastern crude, jet fuel and diesel, and is holding the energy market hostage
All crises and all crudes are not the same. Those buying and selling oil—from large traders to major oil firms—all view the current crisis in the Middle East as the worst disruption since futures markets began trading in the mid-1980s. The crisis is not all about crude oil and is clearly not about gasoline except in Arizona, California, Nevada, Oregon and Washington—where Asian hoarding may bring back gasoline queues. This time it is mainly about diesel. Fig.1 provides a visual measure of the crisis. The graph tracks the price spread (difference) between WTI and Mars. WTI crude is produced in the US Permian Basin, primarily through fracking. It is a light oil that contains little sulphur. Wh
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