A lack of refineries not oil is controlling the supply of diesel
By Mike Adams, Natural News
The most important number in the American economy right now is not the stock market, the jobs report, or even the price of crude oil. It is the diesel crack spread — now $102 over crude. That figure is so far outside historical norms that it does not represent a market correction. It represents a structural collapse in fuel supply.
The economy runs on diesel, you see, not oil. Crude is just a raw material. But diesel is what moves food, medicine, construction materials, and every physical good in this country. When diesel breaks, everything breaks. And the crack spread — the canary in this economic coal mine — just died.
The crack spread is the pricing difference between a barrel of crude oil and the petroleum products refined from it. [1] When it widens, it means refineries cannot keep up with demand for specific fuels. Back in January 2023, analysts were alarmed when the spread hit a three-month high of $42.41, against a five-year January average of just $15.56. [1] Today we are staring at $102. That is not an outlier; it is an emergency.
Jefferies, one of Wall Street’s sharpest energy desks, put it in exactly these words: the Hormuz shock is “manifesting itself in cracks, not crude.” [2] Politicians can easily manipulate crude prices, releasing strategic reserves and spinning narratives. But they cannot fake diesel supply. And when diesel supply tightens, the whole economy follows.
Everyone watches crude. Almost nobody watches refineries. That is a fatal blind spot. A refinery’s configuration determines which fuels it can produce, and American refineries were largely optimized for light sweet crude. Diesel, however, comes disproportionately from the heavier sour barrels that flow through the Persian Gulf (and Venezuela, for those keeping track of the global RISK gameboard).
The war with Iran has cut off exactly those supply lines. Saudi Aramco reported a 33 percent jump in quarterly profits while redirecting what crude it could through its East-West Pipeline to the Red Sea. [3] But pipelines cannot fix a chemistry problem. When refineries are forced to run suboptimal crude slates, diesel output falls, and the crack spread blows out.
This is why I have been warning that drilling alone is a fantasy. You can drill a million new wells and it will not produce a single gallon of diesel unless the refineries can process what comes out of the ground. Refining capacity is the bottleneck — and that bottleneck is now poised to strangle the economy.
While Washington wrings its hands over crude prices, America’s refining capacity is being dismantled from within. California — the state that lectures the rest of the country about energy virtue — has lost two major refineries. The Phillips 66 refinery in Los Angeles and the Valero Energy Corp. refinery in Benicia are closed down, reducing California’s refining capacity by 21 percent. [4]
These are not maintenance shutdowns. They are permanent closures. They come on top of the earlier shuttering of the LyondellBasell refinery in Houston, a sprawling 700-acre facility that produced over 200,000 barrels of fuel per day before its owners decided the upgrade costs were simply too high. [5]
Every one of these closures permanently removes diesel production capacity. Meanwhile, the Strategic Petroleum Reserve has been drained to a 43-year low. [6] There is no buffer. No cushion. When the next disruption hits — and it will — there will be nothing left to absorb it.
Here is what the financial press refuses to tell you: diesel is the fuel of physical reality. Approximately 7 billion ton-miles of freight move by truck every single day in the United States, consuming upward of 2.9 million barrels of diesel per day. [7] Retail diesel has already surged from $3.55 a gallon to $5.60 — a 56 percent increase in the cost of moving every physical good in America. [7] By the end of this year, it could easily reach $8 or even higher.
Farming runs on diesel. Construction runs on diesel. Trains, mining, shipping, manufacturing — all of it runs on diesel. Diesel inflation does not stay in the fuel tank; it works its way into food prices, consumer goods, and construction materials. JPMorgan is already warning that a global food crisis could erupt next year, driven by what its analysts call the “Five Ws”: War, Weather, Warehousing, Water, and Waste. [8] Higher diesel prices will make food inflation far worse.
And the claim that “demand destruction” will fix this? Not without a lot of economic chaos happening first. Shortages cascade from fuel to food to everything else. A fuel shock becomes a food shock, and a food shock becomes a social shock with dire political consequences.
If you live in California, prepare for diesel at $8 to $10 a gallon. The rest of the country may not be far behind. Do not expect the government to save you — the Strategic Petroleum Reserve is nearly empty, and no amount of political spin can rebuild refining capacity that has been permanently destroyed.
What actually protects you is self-reliance. Grow your own food. Store fuel safely if you can. Learn to live without the just-in-time delivery system that is about to break. I have been growing a portion of my own food for years, and it remains one of the most powerful acts of resistance available to a free citizen. [9] The practical knowledge found in books like John Seymour’s classic “Farming for Self-Sufficiency” is worth more than any government program. [10]
The crack spread is the canary. At $102 over crude, that canary is dead. The inflation that follows will be neither polite nor temporary. Prepare now, while you still can.
Watch my video interviews at Decentralize.TV to learn practical steps for off-grid living and decentralizing away from banks, the broken medical system and the stressed power grid
Commenter billy
You cover both areas more than adequately, your long winded regurgitations must take hours typing with one finger.
Why do you suppose, for example, the police don’t arrest Gates. You would say the police chiefs are all joos wouldn’t you.
I’m a bore? I’d rather be that than a bullshit artist like you Joe.
elspeth berry said – “… Some coastal areas of Aus deliver a fair bit of kelp…”
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… and everyone will be tickled to know, here in Victoria it’s ILLEGAL to collect kelp!
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Hooray!
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Seriously, folks, who didn’t see THAT one coming?
Keyboarder, the idea “in order to borrow from the IMF, you have to industrialise” fits perfectly.
Thanks to half a century of poor management and resultant de-facto offshore outsourcing of industrial capacity, we are there. If any country can get itself into enough debt, eg. Australia, then the IMF gets invited in to clean up the books. Everything registered here is effectively owned by the Custodian class. I’m sure they are happy to force a default claim against the people who registered their stuff. Then, in comes the IMF. The custodians do the handover of what is registered in exchange for IMF-created fiat credit, or maybe some Crypto-Trump tokens? How does 10th October sound?
Refineries? In Australia? Who needs them? We don’t need any otherwise we’d have enough of them, right?
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It’s so good that our bought and paid for Uniparty apparatchiks allowed them to disappear, together with any other manufacturing and industry that gave us even a glimpse of self sufficiency and independence.
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So the cattles are still struggling to figure out they’re being headed for the cattle yard by their drovers and their dogs? Allegedly along a so called ‘level playing field’. Ever heard of that ‘level playing field’ BS story boys and girls of Australia?
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In truth, the joint is being collapsed and the Australian middle class is being ever so quietly extinguished !!! Soon enough, it will join a largely unemployed working class to form a struggling serf and peasant class. The Robber Baron Feudalists have taken over the old Aristocrats and are full steam ahead with owning EVERYTHING including the Divine Right of Merchant Kings.
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It means we’ll be happy to make just capuccinos and lattes for each other We don’t need anything else in Oz, right? We’ll have no worries and we’ll own nothing in the world. But we’ll have peace and bliss in ‘Heaven’.
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Good ruck with that, Aussiee boy and girls. You’re running out of time and the cattle yard is only a few sleeps away
“Grow your own food”
Which is all well and good for the boomer generation to which I belong
But who else has the ¼ acre “luxury” that was the norm 30 odd years ago ?
And what about the fertiliser crisis?
Some coastal areas of Aus deliver a fair bit of kelp but as everyone knows, there’s no distribution infrastructure
Hey folks,
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Rest assured no matter HOW BAD the economic society-fracturing SHIT STORM now rolling down the mountain at us, NONE of the low-life anti-Australian baby-eating unelected beauracrats and public officials and sold-out paid-off pollies will suffer AT ALL or want for ANYTHING, because they’ll beat everything THEY need out of US, and just BTW, they’ve got the ruthless remorseless sadistic merciless ARMIES of Treasonous shit-for-brains Granny-bashing child-molesting pig-raping mass-murdering hired mercenary thugs to DO it.
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[ https://www.brighteon.com/9cf498b3-4153-42b2-8015-7c7eeb8e4c20 ]
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Gerald Celente might as well be speaking on behalf of ALL the Useless Eaters now being ground down into the dirt all across the world, including right here in Australia. As Gerald says, we’re heading into “OFF WITH THEIR HEADS” territory, just like has happened REPEATEDLY down through the misty corridors of recorded history.
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Five or six more years of this SHIT, folks, until we’re all outta bubblegum and Mr. Rope and Mr. Lamp Post ride into town.
We have more seed oils than you can poke a stick at. Should be able to use that in trucks. It doesn’t belong in and kitchen.
What’s our debt like now?
I listened to something the other day and they said that in order to borrow from the IMF,
you have to industrialise.
Anyone with more information on this? It explains a lot.
puffin’billirrelevant you’re a bore
Here’s the oil and gas lobby trying to barge their way into WA government with a Trojan horse, excellent citizen journalism (1 min)
https://www.tiktok.com/@last.place.on.earth/video/7675139978027961620
All Alboso has been doing as this snowball slowly gathered size is liquidate more tax payer billions trying to buy up what fuel he can scab from Asia at a premium that will only rise. Just like he liquidated millions of tax payer funds on ethnic group consolidations, political propaganda and brainwash and every other commie sin. Judging by his estimated IQ of 84 he is surely only following directions and likely has no real role as PM other than as a stooge. After a lifetime of attending Sydney Mardi Gras it would be hard to believe he is not totally compromised by his gay sexual proclivities. We all know the rumour of massive PDF ‘presence’ in our politics. Their close friends the Chosen Neanderthals run all the porn and global sex trafficking after all.
According to ‘Last Drop’ there is, with expected resupply: 27.5 days in jet fuel, 29.3 in diesel, 36.2 in petrol.
A kilo of meat I never paid more than $20 before I saw today at $58. Without a block of land or a council plot with a high fence I don’t see how ‘self sufficient’ most people can ever be. Quarter acre blocks maybe. The bleak no fuel future will be a challenge indeed with no food, fuel, trucks, trains, boats and planes.
We have been rolled as a nation but another ‘Eureka’ moment with 100,000? angry ‘diggers’ this time with nothing left to lose could be the end result of a destroyed economy and maybe the only way left to stop it.
When free speech is gone violence is the only alternative left. Not to forget though that splitting of our one ‘vote’ with preferences or how we got here that still remains like a final sword of Damocles above our necks.
Farming for Self-Sufficiency
https://archive.org/details/guide-to-self-sufficiency
Last Drop Fuel level
https://www.lastdrop.au/
“They are professional liars.”
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That is exactly right. Why? THEY WORK FOR THE FILTHY LYING JEWS! They get paid for it.
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Rockefellers (and Rothschilds are ‘Orsini’) and they trace their linage back to Nimrod. They are JEWS. Not friggen ‘swissylanders’.
Mike Adams said – “… Everyone watches crude. Almost nobody watches refineries…”
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Well OF COURSE we don’t watch refineries here in Australia, because we DON’T GOT NONE!
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How do you watch what you DON’T GOT?
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And just BTW, folks, year after year after tedious painstaking poverty-stricken impoverished homelessly afflicted year, Australia is among the TOP 3 world exporters of LNG and is BY FAR the LARGEST coal exporter on the Planet, and we have 40% of the world’s known Uranium reserves and sell it like HOT YELLOW CAKES to the rest of the world.
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But ALL of those things are ILLEGAL right here in Australia, and if you even THINK about any of them you’ll be summarily dragged into the street and publicly drawn and quartered and all your kinfolk and all your worldly possessions will be burned to ashes and flushed down the sewer.
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All inescapable undisputable irrevocably indefatigably incomprehensibly inconvenient TRUTH folks.
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Seriously, you just cannot make this shit up.
It is just a coincidence, I tell ya, that Israel (the Jews) is involved in the coming catastrophe! You know this isn’t incompetency from Satanyahoo and Trump, its a plan, so is this why they built all those private bunkers, stored at least 20 years of food and fuel? They are causing a chaotic Mad Max world…and they know it!
Rockerfellas gang control everything and they know what they are doing, they are ratcheting the price up.
NSW has no refinery so they can run out first, especially Canberra which produces nothing of value.
Imagine politicians so totally ignorant they give all the fuel processing to overseas and try to make all the energy come from windmills.
Chris Bowel and his gang are always happy because they have been promised post-political careers in China, NY, Geneva, etc.
Like Elbow they learned the art of lying from a young age, with media training they have become highly skilled.
They are professional liars.
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