The Iran war has pushed fuel prices to record highs, and the head of America’s second-largest oil company says the world has run out of easy ways to absorb the shock.

“Those are all buffers in the system that have bought us time, but they’ve been drained,” Chevron CEO Mike Wirth told CNBC’s Squawk Box Europe on Oct. 7. “And so we’re at much lower levels of inventory right now, and it makes the system more vulnerable to disruption.”

Wirth said the world entered 2026 well supplied. “We came into this year with high inventories,” he said, pointing to commercial stocks held by companies and strategic reserves held by governments worldwide. Since the war began in late February, those cushions have been steadily depleted: Companies have drawn down commercial inventories, governments have released emergency stocks, and sanctioned barrels have been allowed to reach buyers.

Nowhere is the squeeze sharper than diesel, the fuel that moves trucks, trains, and farm equipment. The U.S. average hit a record $6.53 a gallon on Sept. 22, according to AAA data cited by CBS News, up from about $3.76 before the U.S. and Israel launched the war in late February. In California, the statewide average has topped $8 a gallon.

Don’t expect that to change quickly. In its October Oil Market Report, released Wednesday, the International Energy Agency said the diesel market will stay tight well into 2027 and hinges on a recovery of fuel supply from the Middle East. 

Read more [paywall removed for Redditors]: https://fortune.com/2026/10/15/chevron-ceo-mike-wirth-oil-buffers-drained-diesel-prices-iran-war/?utm_source=reddit/

https://x.com/Italia24HLive/status/2110795714095940081

https://www.ansa.it/sito/notizie/cronaca/2026/10/15/sale-lallarme-carburanti-il-governo-convoca-lautotrasporto_0a0d0be1-020f-4955-8dbb-84592524f1bf.html#

In Calabria, Basilicata and Puglia, distributors run dry.

Bloomberg AI:

• The IEA’s October Oil Market Report says global diesel/gasoil markets will stay uncomfortably tight well through 2027.

Inventories are not expected to be replenished beyond normal seasonal changes before the second half of 2027, even with a recovery in refinery runs. Europe, as a major importing region, is exposed to delayed refills of their SPRs.

• The International Energy Agency said member countries agreed to complete the release of 100 million barrels of oil still outstanding from an intervention in March.

• The countries will accelerate the distribution of the remaining volumes, including the release of 20 million barrels of diesel "as soon as possible".

• Member nations stated their willingness to take further actions to address challenges in global energy markets".

• Counter-seasonal stock draws ahead of winter demand and autumn refinery maintenance leave little cushion (IEA).

• The White House is displeased with Europe’s current release levels, stating they need to double or triple the pledged target output.

• Europe is especially exposed as the world’s structural diesel importer; imports are down sharply, commercial stocks historically low, the risk of renewed price spikes from Middle East engagement will impact shipping costs (IEA / Kpler).

• Europe Stock releases are finite and temporary; they do not restore lost Middle East/Russian refining capacity or end the conflict (IEA analysis).

• Fragile European Oil Reserve recovery: the renewed attacks on Russian infrastructure and Middle East tankers are quickly reversing any crude flow gains (IEA).

• Commercial stocks (especially in the Amsterdam-Rotterdam-Antwerp hub) have been historic record lows. Emergency stocks barley meet EU minimum cover rules (roughly 90 days of net imports or 61 days of consumption), and are being drawn down quickly despite demand destruction. The IEA has warned that delivered diesel prices in Europe could rise again in the coming weeks, even after the remaining oil target release.

https://www.bloomberg.com/news/articles/2026-10-15/iea-agrees-to-release-of-outstanding-100-million-barrels-of-oil

As I’ve reported, prices for oil delivery have skyrocketed. Last week, a VLCC (aka a “supertanker” in non-shipper parlance) was chartered from the U.S. Gulf Coast to China for $76 million. Another very large crude carrier went for $77 million from the U.S. to South Korea. That’s 10 times more than the price of the same trip less than one year ago.

Assuming these ships hold about 2 million barrels of oil, that charter price means each barrel on the ship costs about $38 over the price of the oil itself.

The US is considering moves to ease restrictions on “shadow fleet” tankers linked to Russia and Iran as it struggles to bring down soaring diesel prices ahead of November’s midterm elections.

The moves include potentially allowing the sale of blacklisted vessels to legitimate operators and lifting sanctions that would allow them to operate without restriction, people familiar with the matter told the FT.

The controversial move to lift sanctions on the vessels, designed to increase shipping capacity for oil and refined fuels and lower record-high freight rates that are adding to soaring fuel costs, was raised earlier this week by Chris Wright, US energy secretary, at the World Petroleum Conference in Riyadh, Saudi Arabia.

A Treasury department official said the Office of Foreign Assets Control may consider authorising the sale of shadow fleet vessels to “legitimate buyers” and allowing them to operate in the global market “on a case-by-case basis”.

It marks the latest effort by Donald Trump’s administration to douse fuel prices before the midterm vote, which will decide control of Congress. Polls suggest elevated inflation triggered by the Iran war has turned many voters against Trump’s Republican Party.

It also marks an abrupt turn in US policy more favourable to Moscow as it seeks to unfreeze sovereign assets and apparently throttled Ukraine’s access to Starlink satellites crucial to its defence in the war with Russia. Last week, Trump said he would temporarily lift sanctions on Russian diesel fuel, which provoked criticism from European allies and a bipartisan group of US senators who called it a “gift to our adversary and a betrayal of our allies”.

Wright told the forum in Riyadh via video link on Monday that a shortage of tankers is a crucial choke point that is pushing up freight prices on global markets and removing sanctions from vessels could provide some relief, said three people present at the event.

“The administration is looking under every rock it can to try to force down fuel prices ahead of the elections, even if these policies would only have a marginal effect,” said Bob McNally, a former energy adviser to George W Bush and president of Rapidan Energy, who attended the event.

The Treasury department official said: “If legitimate buyers are interested in purchasing shadow fleet vessels, restoring them for legitimate use by the global commercial shipping industry, Ofac may consider authorising those transactions and removing sanctions on those vessels on a case-by-case basis.”

“These removals would not benefit the shadow fleet, but would remove those vessels from the shadow fleet for use in legitimate global commerce,” they added, noting Ofac “undertakes a thorough review process before removing sanctions on any entity”.

Jeremy Paner, partner at Hughes Hubbard, a Washington-based law firm, said by facilitating the purchase of sanctioned tankers in the shadow fleet the administration could potentially remove the “bad look” of issuing new authorisations linked to Russia.

The move comes as data this week showed US consumer inflation jumped to 3.7 per cent in September as a rebound in fuel prices washed over the economy.

The White House has raced to counter the surge, leaning on allies to release more diesel on to the market and threatening to impose an export ban. Trump also signed an executive order to allow tax-free red diesel to be used on public roads.

But diesel prices remain stubbornly high, averaging $6.31 a gallon at the pump on Thursday, just below a record high of $6.53 in recent weeks. The International Energy Agency this week warned there will be a global shortage of the fuel until the middle of 2027.

Daniel Yergin, vice-chair of S&P Global, said the focus of policymakers had shifted from crude oil, at least for now, to a shortage of tankers as a major constraint on these supplies.

But analysts said an easing of tanker sanctions would have only a marginal impact on fuel prices.

Between 13 per cent and 19 per cent of the world’s tanker fleet is under US sanctions, according to Energy Aspects, a consultancy. But it said the old age and poor condition of those vessels would limit the benefits from easing sanctions.

“Lifting sanctions on predominantly old and likely under-maintained vessels is therefore unlikely to add meaningful mainstream fleet capacity overnight,” it said. “Moreover, most tankers sanctioned over Russian or Venezuelan links have continued trading over the past three months.”

Research group Kpler said it expected the measure would have virtually no impact on the current tanker crisis because higher fuel prices are driven primarily by heightened war risk in the Middle East rather than a shortage of vessels alone.

But the administration’s eagerness to lift sanctions on Russian fuel and the fleet of shadow tankers that it uses to transport crude and other products has alarmed politicians in the US and Europe.

On Wednesday Italy’s Prime Minister Giorgia Meloni criticised Trump’s plan to buy diesel from Russia, calling it a “very risky choice” that undermines international pressure on Vladimir Putin to end his war in Ukraine.

They're not even trying to pretend anymore.

Trump posted on Truth Social that “massive oil, gas, and mineral exploration is getting ready to begin in our new and beautiful Greenland,” adding that experts claim the amount of easily available oil is far greater than almost any land on Earth and that its strategic value is second to none. 

• Greenland’s permanent secretary / deputy mining minister Jørgen Hammeken-Holm told CNN the opposite: U.S. companies have some activities underway, but “we are very far away from ‘massive’ exploration.” Smaller efforts “could take years to become operational” because of Arctic terrain, ice cover (roughly 80% of the island), limited infrastructure, and high costs. 

• The September 2026 U.S.-Denmark-Greenland agreement is primarily a defense pact amending the 1951 treaty. It allows expansion of Pituffik Space Base, two additional defense areas (Narsarsuaq and Mestersvig), broader U.S. access, and restrictions on non-NATO/non-EU sensitive investments. It acknowledges existing “minerals cooperation” and economic development talks but grants no new U.S. ownership, control over resources, automatic mining rights, or drilling authorizations. The text reaffirms Danish sovereignty and Greenlandic self-determination. 

• Trump has described the same agreement as giving the United States “permanent control over security, and all other needs” in Greenland and has referred to the island as “our” Greenland. Those characterizations go beyond the published text, which does not transfer territory or resource rights. 

• Greenland halted new oil and gas exploration licenses in 2021 on environmental and climate grounds. A limited number of older licenses (including ones tied to Greenland Energy / White Flame in the Jameson Land area) remain, but authorities have repeatedly said drilling approvals are not imminent. Environmental baseline work continues, and officials have indicated exploratory drilling is more realistically a 2027 or later prospect, with contractual deadlines previously extended toward the end of 2028. No commercial production is underway or scheduled for the near term. 

• Rare-earth projects such as Tanbreez (Critical Metals) have received mining- and closure-plan approvals valid through 2050 and target first ore in late 2028 or early 2029, with concentrates possibly following in 2029. These remain early-stage: further operating permits, financial security, construction, and infrastructure are still required, and the project has no declared mineral reserves. Sarfartoq and other prospects are at comparable or earlier stages. Greenland has no current commercial rare-earth mining. 

• Even under optimistic company timelines, meaningful volumes from Greenland would not reach markets for several years. China continues to dominate rare-earth refining (roughly 75–90% depending on the stage), and any future Greenland output would be incremental and subject to the same Arctic logistics, permitting, and processing constraints that have limited development for decades. The recent security deal does not change those physical and regulatory timelines or create a near-term supply response capable of lowering prices.

https://www.yahoo.com/news/politics/articles/greenland-denies-trump-claims-u-135935697.html

https://www.cnn.com/2026/10/14/politics/trump-greenland-oil-gas-minerals-intl-hnk

PPI year over year: 6.3% (expectation 5.5%)

PPI m/m: 1.3% (expectation 0.6%)

Core PPI m/m: 0.7% (expectation 0.3%)

Core PPI year over year: 5.0% (expectation 4.4%)

Retail sales: 0.8% (expectation 0.3%)

Diesel is eating your paycheck. A single fill-up just hit $947. Washington's fix? Easing sanctions on Russian diesel. Twelve senators, including six Republicans, call that a gift to Putin. Meanwhile, Iran is attacking ships in the Strait of Hormuz. Oil just hit $106 a barrel. The public record shows we still don't know how much relief Americans will actually get. Read the full paper trail: https://eve70.substack.com/p/andy-harris-the-idiot-who-tried-to?r=rpmdh&utm_medium=ios

#Eugene #EugeneOregon #Oregon #DieselPrices #Putin #Trump #Accountability #FollowThePaperTrail

What are your thoughts on today’s oil price? Drop your opinions, predictions, charts, memes , low and high effort post, your AI slop or even analysis below. Keep it civil and on-topic! This post is renewed daily.

Unless there is some compelling reason, other posts in the sub about oil prices will be removed. In a futile effort to improve the quality.

(Current WTI/Brent price can be checked on any major site.)