Book Says Russian Diesel Won't Offset Price Surge
I pulled into a truck stop outside Des Moines last week, and the number on the diesel pump made me do a double-take. $6.41 a gallon. The guy next to me, a soft-spoken owner-operator named Rick who's been hauling freight for 27 years, just shook his head. "I remember when I could fill this rig for under $300," he said, topping off a 200-gallon tank. "Now it's north of a grand, and I'm not even sure how long I can keep doing this."
That conversation stuck with me. Because while most of us watch gasoline prices like a hawk, diesel is the fuel that really keeps the lights on. It powers the trucks that deliver your Amazon packages, the tractors that harvest your food, the trains that move coal and steel. And right now, diesel is in the middle of a historic price spike that has economists, energy analysts, and policymakers scrambling for answers.
Enter Kevin Book, managing director at ClearView Energy Partners. Book has spent decades studying energy markets, and he's become something of a go-to voice for anyone trying to make sense of this mess. His latest take? The diesel deal brokered between Washington and Moscow — the one that's supposed to flood global markets with Russian supply — probably won't do much to bring prices down. At least not enough to matter.
Let me explain why that matters, and why this story is about a lot more than just what you pay at the pump.
The 70% Problem Nobody Saw Coming
Here's the headline number that should make you sit up straight: US diesel prices have climbed roughly 70% since the US-Israeli war with Iran began earlier this year. To put that in perspective, the average price of a gallon of diesel hit $6.28 in early October, according to AAA — just shy of the all-time record set back in September. In California, it's even worse. A gallon of diesel there cost $8.35.
If you're wondering why this is happening, you're not alone. The answer is a perfect storm of geopolitical chaos and structural neglect.
Start with the Middle East. The Iran war has constricted tanker traffic through the Strait of Hormuz — the narrow waterway through which roughly a fifth of the world's oil passes — and seeded attacks on refineries and infrastructure across the Persian Gulf. The US Energy Secretary has publicly claimed that tanker traffic through Hormuz is higher than reported, but shipping data tells a more complicated story. Either way, the flow of refined products out of the Gulf has been badly disrupted.
Then there's Russia. You've probably heard about the Trump-Putin diesel deal — the one where Russia agreed to increase diesel exports to global markets in exchange for Washington suspending sanctions on Russian diesel through April 1, 2027. On paper, it sounds like a lifeline. In practice? That's where Kevin Book comes in.
Why Russian Diesel Won't Save the Day
Book's assessment is blunt: additional Russian diesel is unlikely to offset the roughly 70% run-up in prices. He estimates that increased volumes could provide "roughly 5 to 20 cents a gallon in relief by the end of the fourth quarter". That's it. A dime or two, maybe. When you're paying over six bucks a gallon, that's barely a rounding error.
So why won't the deal work?
The first problem is volume. Russia has long been one of the biggest players on the global diesel market. In 2025, Russian exports accounted for about 3% of global diesel consumption and almost 10% of international trade volumes, putting it in second place among exporters, behind the United States and ahead of Saudi Arabia. That's substantial. But here's the catch: Russia's diesel exports have collapsed in recent months. As recently as April, Russia had about 3 million tons of diesel available for export per month. By September, that figure had fallen almost ten-fold — to around 325,000 tons per month.
Why the collapse? Ukrainian drone strikes. Russia's refining sector is in serious trouble. According to the International Energy Agency, diesel production in Russia is estimated to have fallen by nearly 30% compared to 2025 levels. In the first eight months of 2026, a Russian refinery was hit on average once every three days. Half of Russia's top six diesel-producing refineries — Omsk, Kirishi, Taneco, Volgograd, NORSI, and Perm — had to significantly halt or reduce production in September due to drone damage. Some refineries have been attacked as many as 15 times since 2022. Repairs to complex secondary refining units, which are crucial for producing high-quality diesel, can take six to eight months on average.
The Moscow refinery was so severely damaged during a Ukrainian attack in June that it's reported to be offline until early 2027. And Western sanctions are limiting Russia's access to replacement equipment, making repairs even harder.
In short, Russia simply doesn't have the diesel to spare. The export ban the Kremlin imposed in July to stabilize domestic prices is still in place, and Moscow has been forced to prioritize its own farmers and truckers over international customers. The Russian government has even said that sanctions would need to be lifted entirely for Russian diesel to "flood international markets" — a pretty clear signal that the current deal is more about politics than supply.
The Bigger Picture: A Global Refining Crunch
But here's where it gets interesting. The Russian diesel issue is just one thread in a much larger tapestry of dysfunction. The real story is a global refining capacity crunch that's been building for years and is now colliding with two wars and a seasonal demand surge.
Let me break it down.
Global refining capacity grew an average of just 0.6% a year from 2015 to 2025, according to data from the Energy Institute. In OECD countries, capacity actually contracted by an average of 0.2% a year over that period. The European Union? Down 0.7% annually. Australia? A staggering minus 6.9%. Japan? Minus 1.8%. The US has been roughly flat, at minus 0.1%.
Meanwhile, demand for diesel — the workhorse fuel of the global economy — has kept growing, especially in Asia and Africa. The result is a market that was already tight before the Iran war and the Russia-Ukraine conflict made things dramatically worse.
The Crack Spread Tells the Story
If you want to understand just how severe this crunch is, look at the diesel crack spread. That's the price difference between a barrel of crude oil and a barrel of diesel refined from it. Under normal conditions, with balanced supply and adequate inventories, crack spreads hover around $20 to $30 a barrel.
In August 2026, the US diesel crack spread hit an all-time high of $102.20 a barrel. Think about that for a second. The margin on refining diesel was more than triple what it normally is. In Europe, the ICE gasoil crack hit a record $79 a barrel.
These aren't just numbers on a screen. They translate directly into what you pay at the pump, what farmers pay to harvest their crops, and what trucking companies pay to keep their fleets on the road.
Global refinery runs in August were down more than 6 million barrels per day compared to the previous year. The world's remaining unconstrained refining capacity is running at close to maximum levels — US refinery utilization approached 97% this summer. There's essentially no slack left in the system.
Why Farmers Are Getting Hit Hardest
Let me take a brief detour here, because it's important to understand who's actually feeling this pain first.
Diesel is the lifeblood of agriculture. A combine harvester burns about 300 gallons of diesel a day during harvest season. In California, that's roughly $2,500 worth of fuel — per day, per combine. Wayne Gularte, who grows crops on 600 acres near Gonzales, California, told Reuters that his fuel costs have become a genuine threat to his operation.
"We are in the heart of fall harvest, when combines, tractors, grain carts, and trucks run long hours moving crops from fields to storage and elevators," said David Ortega, a food economist at Michigan State University. "That shortage will be acutely felt by the farmers during the harvest, and so the inflationary consequences can be greater at harvest time," Book added in a Politico interview.
And it's not just farmers. Diesel powers 76% of commercial vehicles in the US. Semi-trucks, freight trains, barges, delivery vans — almost everything that moves goods in this country runs on diesel. When diesel gets expensive, the cost of literally everything goes up. As Ortega put it: "Most consumers never buy a gallon of diesel, but almost everything they do buy moved on diesel at some point, often several times, between production and the store shelf".
The Trump Administration's Scramble
So what's the White House doing about it?
Quite a lot, actually — though the results have been mixed at best. President Trump has pressed allies to release emergency oil reserves, and the G7 agreed to release 100 million barrels of oil and petroleum products. But according to reporting from Reuters, those barrels appear to largely cover what remains of a previous emergency release, rather than representing new supply.
The administration also rolled out an executive order allowing red-dyed diesel — normally restricted to off-road use like farming — to be sold for highway use through the end of the year. The idea was to expand supply by tapping into fuel that's chemically identical to regular diesel but exempt from the 24.4-cent-per-gallon federal highway tax.
Here's the thing, though: the industry hasn't exactly embraced the idea. Major retailers and marketers are wary of selling red-dyed diesel because of unclear tax liabilities, logistical hurdles, and the risk of fines when trucks cross state lines. And the tax savings are relatively small when diesel is above $6 a gallon. As John Tirado, president of New Jersey-based fuel supplier Summa Energy, put it: the red-dyed diesel plan is "a Band-Aid on a much bigger problem".
Then there's the diesel export ban. Trump has said he's looking "very seriously" at restricting US diesel exports to keep more supply at home ahead of the midterm elections. Farm-state lawmakers have been pushing hard for this, arguing that it would help farmers during harvest season. But Energy Secretary Chris Wright has dismissed the idea of a "blanket ban," and analysts warn that restricting exports could backfire — discouraging investment in refining capacity and ultimately leading to higher prices.
The politics here are brutal. High fuel prices have made it harder for Trump and congressional Republicans to defend narrow majorities in the November 3 midterm elections. The cost of living is the top issue cited by voters, and high diesel prices put particular pressure on traditional Republican constituencies: farmers, truckers, and rural voters. Trump's approval rating hit a record-low 32% in a Reuters/Ipsos poll.
What About Those 5 to 20 Cents?
Let me circle back to Book's estimate. He said increased Russian volumes could provide roughly 5 to 20 cents a gallon in relief by the end of the fourth quarter. That might sound trivial, but in a market this tight, every little bit helps. The problem is that it's not nearly enough to bring prices back to anything resembling normal.
Book also warned that further escalation in the Middle East could put more critical Saudi energy infrastructure at risk, potentially creating a much larger disruption to oil markets. That's the real wild card here. If the conflict widens — if Hezbollah or the Houthis or Iran itself decides to strike Saudi oil facilities — all bets are off.
The structural issues aren't going away anytime soon, either. S&P Global Energy now projects that global diesel crack spreads will average around $84 a barrel for the remainder of 2026 — an upward revision of $31 a barrel from previous forecasts. The firm also expects global refining runs in the fourth quarter to be about 2 million barrels per day lower than previously anticipated. And in the Middle East, crude production and refining operations aren't expected to return to pre-war levels before the end of 2027.
"Winter is coming for diesel markets," said Karim Fawaz, an executive director at S&P Global Energy. "The industry has spent six months managing a record disruption, but the next challenge is adapting to a world where supply remains constrained for longer than expected. Inventories are low, spare refining capacity is scarce, and seasonal demand is about to strengthen at exactly the wrong moment".
That's a pretty grim assessment. And it's worth noting that global diesel exports averaged just 5.85 million barrels per day in August 2026 — a 25% drop compared to August 2025. With winter heating demand approaching in the US Northeast, Europe, and North Asia, the pressure isn't going to let up.
The European Angle
I'd be remiss if I didn't mention what's happening on the other side of the Atlantic. The EU economy chief, Valdis Dombrovskis, told AFP that Russian diesel sales recently authorized by the United States are unlikely to move prices. "If we look at the volumes, they are not of any macroeconomic significance, and frankly, there are strong doubts whether Russia is even able to supply those volumes, and according also to US quality standards, those are big question marks," he said.
That's a diplomatic way of saying: don't hold your breath.
Europe has its own set of problems. The EU prohibits the import of seaborne crude oil and refined petroleum products from Russia, and in cooperation with the UK, G7, and Australia, it's imposing a price cap on high-value Russian products, including diesel, of $100 per metric ton. These sanctions have been effective at reducing Russia's revenue, but they've also contributed to the global supply crunch.
European diesel inventories have dropped around 30% since the end of March, and they're well below seasonal averages. The IEA expects global oil inventories to stay 20% to 30% below normal through winter, when Europe leans harder on imported heating oil and diesel.
Dombrovskis also noted that the European Commission will be upgrading its inflation projections due to the war in Iran, now in its eighth month and seeing broadening fighting in the region. Spiking sovereign bond yields, especially in France, are adding to the uncertainty. The yield on 10-year French government bonds is flirting with 5% — a level not seen since 2002.
What Could Actually Help
So if Russian diesel won't save us, what will?
Honestly, there's no quick fix. But there are a few things that could move the needle over the medium term.
A durable end to the conflicts. Bob McNally, president of Rapidan Energy Group, put it bluntly: "Aside from a recession that hammers consumption, the only thing that can prevent oil prices from rising further and put them on a sharp downward trajectory is a durable end to conflicts in the Arabian Gulf and between Russia and Ukraine. Otherwise, policy options range from marginal to counterproductive".
Rebuilding refining capacity. The world has been underinvesting in refining for a decade. That's not something you fix overnight — new refineries take years to build and cost billions. But the current crisis is a stark reminder that you can't run a modern economy without the ability to turn crude oil into the fuels that actually power things.
Rebuilding inventories. Global observed oil inventories fell by 507 million barrels between the start of the war and the end of August, according to the IEA. Refilling those stockpiles will take time, but it's essential for buffering against future shocks.
Demand destruction. This is the ugly one. Goldman Sachs has suggested that diesel prices may need to stay high through 2027 to force enough demand destruction to rebalance the market. In other words, prices might have to stay painful long enough to convince people to use less.
The Human Cost
I keep thinking about Rick, the trucker at that Des Moines truck stop. He's not a statistic. He's a guy with a mortgage and a kid in community college and a truck that's been in his family for two decades. When diesel prices spike, he doesn't have the luxury of passing the cost on to customers. He eats it. Or he parks the truck and finds something else to do.
Multiply that by millions of truckers, farmers, fishermen, and small business owners across the country, and you start to understand why this matters. Diesel isn't just a commodity. It's the invisible lubricant that keeps the entire economy moving.
Kevin Book's assessment — that Russian diesel won't offset the price surge — isn't just a market call. It's a warning. The forces driving this crisis are structural, geopolitical, and deeply entrenched. There's no magic switch to flip. No deal that can be signed to make it all better.
The only thing that can truly fix this is time, investment, and a bit of luck. And for the people who depend on diesel to make a living, that's a hard truth to swallow.
A Looming Winter
As I write this, winter is approaching in the Northern Hemisphere. Heating oil demand is about to spike. Harvest season is still in full swing. And global diesel inventories are sitting at historic lows.
Book's 5 to 20 cents of relief might materialize. It might not. Either way, the road ahead is going to be bumpy. The diesel market is facing its most challenging period in decades, and the policies being debated in Washington and Brussels are, at best, marginal fixes to a systemic problem.
The next time you see a semi-truck rumbling down the highway, take a moment to think about what's powering it. Because right now, the fuel that keeps America moving is more expensive, more scarce, and more geopolitically fraught than at any point in recent memory.
And that's not a problem that any single deal — Russian or otherwise — is going to solve.
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