a critical piece i’ve come to understand this year is that processing fuel into diesel (aka No. 2 Fuel Oil) is a bit of a bottleneck globally. so in the current landscape, US capital formations control a lot of that capacity for processing but the demand for that capacity exceeds global supply.
a lot of heavy equipment and transport logistics rely heavily on diesel, as does agriculture. so aside from places that have been pivoting to electrification for this sort of heavy machinery, the demand pressure for strategic use is strong. like not so much Bozo Chungus in his Ford F350, but CSX and Norfolk Southern and other logistics companies that more or less funnel materials and consumer goods into the bottomless maws of america. so capital formations all over are bidding up that diesel refining capacity and continue to drive diesel prices higher and higher because simply not enough of it is being created. china and the US are by far the most dominant countries in terms of capacity for refining diesel and certainly china is/will deploy this strategically. the US will allow it to be controlled by the highest bidder.
theoretically, the US government could try to reserve that capacity for the domestic market only (especially logistics, agriculture, and heating) as some kind of national security/stabilization act but it would go against the most empowered formations under Trump who are making a killing right now (and likely induce some kind of existential resistance strategy that they must have planned for) also, it would be absolutely brutal for europe and much of the world.
a critical piece i’ve come to understand this year is that processing fuel into diesel (aka No. 2 Fuel Oil) is a bit of a bottleneck globally. so in the current landscape, US capital formations control a lot of that capacity for processing but the demand for that capacity exceeds global supply.
a lot of heavy equipment and transport logistics rely heavily on diesel, as does agriculture. so aside from places that have been pivoting to electrification for this sort of heavy machinery, the demand pressure for strategic use is strong. like not so much Bozo Chungus in his Ford F350, but CSX and Norfolk Southern and other logistics companies that more or less funnel materials and consumer goods into the bottomless maws of america. so capital formations all over are bidding up that diesel refining capacity and continue to drive diesel prices higher and higher because simply not enough of it is being created. china and the US are by far the most dominant countries in terms of capacity for refining diesel and certainly china is/will deploy this strategically. the US will allow it to be controlled by the highest bidder.
theoretically, the US government could try to reserve that capacity for the domestic market only (especially logistics, agriculture, and heating) as some kind of national security/stabilization act but it would go against the most empowered formations under Trump who are making a killing right now (and likely induce some kind of existential resistance strategy that they must have planned for) also, it would be absolutely brutal for europe and much of the world.