It seems one way Iran fights the US asymmetrically is by harming the Federal financial picture with endlessly higher rates + borrowing costs. If this keeps happening month-after-month, year-after-year, we're really going to feel the squeeze.
Treasury has already tried to reassure markets and failed
>This was the desired effect though, as higher oil prices means more profit for US based oil producers. I'm sure that will trickle down any time now.
That's giving the Trump administration too much credit. Before the war there were pieces about how oil companies were doing worse under Trump than under Biden[1]. Of course, you could argue that the Iran war is Trump finally responding to oil companies, but given that it only started more than a year after he took power, it really makes you wonder whether Trump is bumbling along, or playing some 5d chess with the global oil market. On the flip side there's plenty of evidence that he doesn't want high oil prices, for instance lifting sanctions on Iranian and Russian oil.
If oil starts ruining the financial picture on top of just the...global welfare of every living human picture, then maybe, just maybe people will actually give up their addiction.
Last I checked, depending on one’s needs, used EVs are among some of the best values in the US used car market. Their prices are closer to what prices on used gas cars would’ve been had the market not been turned on its head during the pandemic.
The main caveat is that available models are heavily weighted towards “compact” (RAV4 sized) SUVs and larger. There aren’t many little Prius/Fit/Soul type town car models around which is a bit paradoxical with that being the use case that EVs have been well suited to for the longest time.
Refinery capacity is the bottleneck, there are only ~420 of them that remain [1] globally. We won't run out of oil, we will run out of refineries as they slowly close over the next 10-15 years. No new ones will be built, out of stranded asset risk. The more painful oil is now, the faster permanent changes occur to destroy the future demand curve [2]. An EV deployed today will last long into the future, while ICE combustion sales continue to decline.
China has destroyed oil import demand the equivalent of annual UK oil imports in the last six months, for example. Push those oil and diesel prices up, hold them up as long as possible. Several countries have banned internal combustion vehicle imports to push the needle on the EV trajectory (Ethiopia, Laos) because they are fossil fuel poor. Global EV sales have spiked, and already exceed 25% of total annual vehicles sales.
How much fossil supply chain infra must be impaired to further move the needle? Hard to say, excited to find out.
The market values Diesel more. Diesel fuel has more energy per gallon, and a diesel engine as run in the real world is more energy efficient (in a lab gasoline is slightly more energy efficient, but the difference is slight and the conditions needed to make this happen are rare in the real world). Thus those who use a lot of fuel - things like freight and earth moving normally use diesel engines. These are also applications that have less elasticity, so when price goes up they don't use less. (when gas prices go up a few people drive less - or buy more fuel efficient cars, people running diesel already are buying the best fuel efficiency they can for their needs).
While diesel is less refined, the difference isn't much. These days both are heavily refined products, and the cost to refine gasoline isn't very much per gallon.
The real answer: supply/demand is the key factor in the price you pay. Cost to create/build a product generally sets a floor on the price you pay: a business that isn't making money will stop making the product (loss leaders exist, but not a factor here).
That sounds like a great theory but is not consistent with the observation that until not too long ago, diesel used to be cheaper. How do you explain that?
That's the problem with hindsight theories, especially if only using a limit horizon into the past.
Ultra-low-sulfur diesel became mandated in 2006 as the only type that was legal to sell for road use. That requires extra refining to remove the naturally-occuring sulfur from the fuel which is why the cost went up.
I have only a passing interest in this but, basically, different oil fields have different percentages of different weight hydrocarbons. The oil can be refined with catalytic cracking to make more gas / kerosene / whatever. As I understand it, we're using "lighter" oil and we're focusing on making gas, so the percentage diesel in the crack spread is lower. So, there's less diesel coming out of the refineries.
This started, I believe when fracking became a major thing (the late 2000s), because shale oils tends to have less heavy hydrocarbons then the old wells.
If the demand for other fuels increases, the cost of diesel can be indirectly affected.
Jet fuel and diesel fuel come from similar parts of the barrel. Refineries can largely choose what kind of fuel they produce for a given unit of input. One barrel doesn't always split into the same fractions. There is configuration involved.
I thought I heard once it was because diesel might be more polluting than regular gas and thus has extra taxes on it? I could be entirely wrong though.
Not in the US, but I believe there are some countries that have tried that. For a while Europe (in general - but individual countries had different policies!) had less tax on diesel because it was more energy efficient, then they realized it was more polluting (less CO2, but more NOx...) and started encouraging gasoline which they decided was overall better.
In the US diesel taxes are often different from gasoline, but polluting is generally not a factor.
Supply and demand? Over here in Germany, Diesel was cheaper than (any kind of) gasoline for a long time, but that has also changed recently (Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive...
Remember, the grandiose leader said the Iran special military operation will be over after the midterm elections. Unfortunately he meant the 2034 midterms.
Lockheed would still agree that it's good for them - replacing all those $4 million Patriot rockets expended in the Middle East to shoot down Shahed drones that are one or two orders of magnitude cheaper is going to fill their order books for years to come...
Only for a short time, everybody knows about cheap drones and they are ordering cheap drones (likely from Ukraine where they are field tested to work) to shoot down drones. If the next round is in a few years patriots will only be used on much more expensive ballistic missiles.
That said, the patriot is a lot cheaper replace than the things it was defending so it was a good investment even if expensive.
A lot of the “savings” in US get eaten up through poor economy, poor driving strategy and dependence on traffic lights + stop signs instead of roundabouts + “traffic from the left/right gets priority” yield-by-default junctions.
Diesel at the local garage I passed at lunchtime is £1.89 (57% more). The web [0] suggests that is more expensive than anywhere in europe other than France and Denmark for some reason.
So nowhere near "half as cheap". Throw in poor American average mileage and I suspect the price-per-mile is quite similar.
Diesel engines in the US are used for things where they do count fuel costs. (there are a few diesel cars/SUVs, but they are a tiny minority). In short for most diesel users the efficiency is very similar between US and Europe.
Israel has caused more damage the the US and entire world than any other country. They blackmailed our politicians into this war and we continue to suffer for their bloodlust.
What is it "inflation adjusted" or is that cyclical because inflation itself measures/is a measure of the cost of diesel (which bleeds into the cost of goods and services)?
>strategic oil reserve is about to experience permanent catastrophic damage from being drained too low
Apparently salt domes have a life span, you pump water in to remove oil. The water wears at the domes and removes more salt creating a larger cavern. It's not that we pumped out so much oil lately, it's because we were pumping out little bits over the last 5 decades constantly wearing at the domes. They were created at the time to only be used in a catastrophic situation, not when ever you want to control the price of oil......
Either way, you are correct in that their life has come to an end, we will require more expensive above ground storage going forward or we can electrify.
The Ukraine angle is another cheap shot by CBS (state sponsored news). Prices are rising because of Trumps adventurism in the the ME and now that the Houthies will likely control the Bab el-Mandeb Strait, world markets are reacting.
There is nothing stopping US refineries from producing more diesel, you can use both sweet and sour, this is speculators squeezing the markets.
What a great time it should be to electrify heavy transportation. If they can do it in mining and construction, why can't transportation...
$6 a gallon is about €1.36 a litre - thats cheap compared to a European average of €2 per litre.
Still that makes very clear why Venezuela had to happen before Iran.
It seems one way Iran fights the US asymmetrically is by harming the Federal financial picture with endlessly higher rates + borrowing costs. If this keeps happening month-after-month, year-after-year, we're really going to feel the squeeze.
Treasury has already tried to reassure markets and failed
Add to this other trade war nonsense...
This would not be happening if the USA had not launched an attack on Iran
This was the desired effect though, as higher oil prices means more profit for US based oil producers. I'm sure that will trickle down any time now.
> This was the desired effect though
Honestly, I think you're giving far too much credit to the current US government.
>This was the desired effect though, as higher oil prices means more profit for US based oil producers. I'm sure that will trickle down any time now.
That's giving the Trump administration too much credit. Before the war there were pieces about how oil companies were doing worse under Trump than under Biden[1]. Of course, you could argue that the Iran war is Trump finally responding to oil companies, but given that it only started more than a year after he took power, it really makes you wonder whether Trump is bumbling along, or playing some 5d chess with the global oil market. On the flip side there's plenty of evidence that he doesn't want high oil prices, for instance lifting sanctions on Iranian and Russian oil.
[1] https://www.economist.com/business/2025/02/06/donald-trump-l...
Refineries in US are making even bigger profits. They even skip on maintenance running at 95% capacity non-stop.
If oil starts ruining the financial picture on top of just the...global welfare of every living human picture, then maybe, just maybe people will actually give up their addiction.
I'd be more than willing to go electric if someone sends me the cash to get an electric, because if I could replace my diesel-guzzling 11yo I would.
Last I checked, depending on one’s needs, used EVs are among some of the best values in the US used car market. Their prices are closer to what prices on used gas cars would’ve been had the market not been turned on its head during the pandemic.
The main caveat is that available models are heavily weighted towards “compact” (RAV4 sized) SUVs and larger. There aren’t many little Prius/Fit/Soul type town car models around which is a bit paradoxical with that being the use case that EVs have been well suited to for the longest time.
Yes because everyone wants a massive EV with a degraded 10 year old battery
You can't trade in for a used EV that likely wouldn't cost you anything and would save you money?
No if you actually do the math it’s not worth it.
Same here. Too bad they got rid of the rebates.
I'd go electric if they were just cars and not shit android tablets with wheels stuck on them.
You think the planet is gonna run out of oil before it runs out of water.... interesting.
Refinery capacity is the bottleneck, there are only ~420 of them that remain [1] globally. We won't run out of oil, we will run out of refineries as they slowly close over the next 10-15 years. No new ones will be built, out of stranded asset risk. The more painful oil is now, the faster permanent changes occur to destroy the future demand curve [2]. An EV deployed today will last long into the future, while ICE combustion sales continue to decline.
China has destroyed oil import demand the equivalent of annual UK oil imports in the last six months, for example. Push those oil and diesel prices up, hold them up as long as possible. Several countries have banned internal combustion vehicle imports to push the needle on the EV trajectory (Ethiopia, Laos) because they are fossil fuel poor. Global EV sales have spiked, and already exceed 25% of total annual vehicles sales.
How much fossil supply chain infra must be impaired to further move the needle? Hard to say, excited to find out.
[1] https://news.ycombinator.com/item?id=49479229 (citations)
[2] https://news.ycombinator.com/item?id=49647405 (citations)
In the late 90's/ early 2000 Diesel was about the same cost as regular gas and then at some point its about the same cost as premium gas.
Is there any reason why Diesel costs more? I was always under the impression that it was a less-refined fuel therefore cheaper.
The market values Diesel more. Diesel fuel has more energy per gallon, and a diesel engine as run in the real world is more energy efficient (in a lab gasoline is slightly more energy efficient, but the difference is slight and the conditions needed to make this happen are rare in the real world). Thus those who use a lot of fuel - things like freight and earth moving normally use diesel engines. These are also applications that have less elasticity, so when price goes up they don't use less. (when gas prices go up a few people drive less - or buy more fuel efficient cars, people running diesel already are buying the best fuel efficiency they can for their needs).
While diesel is less refined, the difference isn't much. These days both are heavily refined products, and the cost to refine gasoline isn't very much per gallon.
The real answer: supply/demand is the key factor in the price you pay. Cost to create/build a product generally sets a floor on the price you pay: a business that isn't making money will stop making the product (loss leaders exist, but not a factor here).
I found this Planet Money Episode [0] really insightful as well to understand the components that drive the price of a gallon of gasoline.
[0] https://www.npr.org/2022/08/31/1120422634/breaking-down-the-...
That sounds like a great theory but is not consistent with the observation that until not too long ago, diesel used to be cheaper. How do you explain that?
That's the problem with hindsight theories, especially if only using a limit horizon into the past.
Ultra-low-sulfur diesel became mandated in 2006 as the only type that was legal to sell for road use. That requires extra refining to remove the naturally-occuring sulfur from the fuel which is why the cost went up.
Isn’t that sulfur more valuable than ever now?
I have only a passing interest in this but, basically, different oil fields have different percentages of different weight hydrocarbons. The oil can be refined with catalytic cracking to make more gas / kerosene / whatever. As I understand it, we're using "lighter" oil and we're focusing on making gas, so the percentage diesel in the crack spread is lower. So, there's less diesel coming out of the refineries.
This started, I believe when fracking became a major thing (the late 2000s), because shale oils tends to have less heavy hydrocarbons then the old wells.
If the demand for other fuels increases, the cost of diesel can be indirectly affected.
Jet fuel and diesel fuel come from similar parts of the barrel. Refineries can largely choose what kind of fuel they produce for a given unit of input. One barrel doesn't always split into the same fractions. There is configuration involved.
Probably doesn’t help that the ethanol that gets (increasingly) blended with gas is pretty cheap while the seed oils blended with diesel aren’t.
And the ethanol makes the fuel less valuable (energy reduction per litre) moreso than biodiesel.
I thought I heard once it was because diesel might be more polluting than regular gas and thus has extra taxes on it? I could be entirely wrong though.
Not in the US, but I believe there are some countries that have tried that. For a while Europe (in general - but individual countries had different policies!) had less tax on diesel because it was more energy efficient, then they realized it was more polluting (less CO2, but more NOx...) and started encouraging gasoline which they decided was overall better.
In the US diesel taxes are often different from gasoline, but polluting is generally not a factor.
You are not required to repeat uncited and likely incorrect suppositions.
Supply and demand? Over here in Germany, Diesel was cheaper than (any kind of) gasoline for a long time, but that has also changed recently (Gemini says since Russia attacked Ukraine in 2022, so another thing to blame Putin for), now it's about 5% more expensive...
...because Diesel is taxed differently than standard gas/Benzin there...
EDIT: meaning "less taxes"
I was always under the impression that it was a less-refined fuel therefore cheaper.
I was always under the impression that a big part of the difference in cost is largely due to taxes.
It is, but it isn’t because of free market economy.
Remember, the grandiose leader said the Iran special military operation will be over after the midterm elections. Unfortunately he meant the 2034 midterms.
Initially he said it would be over after four to five weeks. Back in March.
Is this a new high water mark for inflation adjusted prices?
I am not interested in nominal new highs.
The gas stations around me in NY had been hanging onto $5.99 9/10 for dear life.
Remember when the common knowledge was that war was good for the economy?
It is, but only if you don't suck at it very bad
The moron in the White House is bombing his own oil supply.
Rule of Acquisition number 34: War is good for business.
Rule of Acquisition number 35: Peace is good for business.
Lockheed would still agree that it's good for them - replacing all those $4 million Patriot rockets expended in the Middle East to shoot down Shahed drones that are one or two orders of magnitude cheaper is going to fill their order books for years to come...
Only for a short time, everybody knows about cheap drones and they are ordering cheap drones (likely from Ukraine where they are field tested to work) to shoot down drones. If the next round is in a few years patriots will only be used on much more expensive ballistic missiles.
That said, the patriot is a lot cheaper replace than the things it was defending so it was a good investment even if expensive.
That needs an update: Winning wars, if you win in a clean and non-Pyrrhic way, is usually good for the economy.
Losing at war is universally bad. And long stalemated forever wars can be just as bad for both sides.
Luckily, for the bean counters, the dead can't speak.
still half as cheap as in EU
A lot of the “savings” in US get eaten up through poor economy, poor driving strategy and dependence on traffic lights + stop signs instead of roundabouts + “traffic from the left/right gets priority” yield-by-default junctions.
I think cost per kilometre/lightyear/rod is close
What you on about? A gallon of diesel is 5,9 euros in Italy and 8,6 euros in Germany. In other countries anywhere in between
It works out at €1.40 a litre, or £1.20 a litre.
Diesel at the local garage I passed at lunchtime is £1.89 (57% more). The web [0] suggests that is more expensive than anywhere in europe other than France and Denmark for some reason.
So nowhere near "half as cheap". Throw in poor American average mileage and I suspect the price-per-mile is quite similar.
[0] https://www.fuel-prices.eu/live/
Diesel engines in the US are used for things where they do count fuel costs. (there are a few diesel cars/SUVs, but they are a tiny minority). In short for most diesel users the efficiency is very similar between US and Europe.
Diesel in Norway was about €2.5 a litre today.
My grandma called last night and mentioned that diesel was 2.50 €/litre. That would make it about $8.75 a gallon.
Israel has caused more damage the the US and entire world than any other country. They blackmailed our politicians into this war and we continue to suffer for their bloodlust.
No. The US is a sovreign nation. Noone "made" them act like that, they did this all by themselves and now thy try to shrug the responsibility.
Epstein was a mossad agent.
Americans get what they voted for. This is what the republican party stands for: throwing the common man under the bus to protect the Epstein class.
I want to know what happened to all the free trade republicans we used to know... If anyone knows where they went I want to join them.
https://xkcd.com/3290/
These is one xkcd for everything, huh?
What is it "inflation adjusted" or is that cyclical because inflation itself measures/is a measure of the cost of diesel (which bleeds into the cost of goods and services)?
It's up 60% from a year ago, so adjusted for inflation, it's actually only up about 57% from a year ago.
> up 60% from a year ago
Inflation is high ... but not that high
and remember $6 is average, diesel is $10 in some places
even if you do not drive, it affects every delivery
imagine this pattern through 2029
https://gasprices.aaa.com/
800 more days, even just a penny increase per day
we're out of $4 Million dollar tomahawks and the iranians have endless supply of $50K drones
strategic oil reserve is about to experience permanent catastrophic damage from being drained too low
>strategic oil reserve is about to experience permanent catastrophic damage from being drained too low
Apparently salt domes have a life span, you pump water in to remove oil. The water wears at the domes and removes more salt creating a larger cavern. It's not that we pumped out so much oil lately, it's because we were pumping out little bits over the last 5 decades constantly wearing at the domes. They were created at the time to only be used in a catastrophic situation, not when ever you want to control the price of oil......
Either way, you are correct in that their life has come to an end, we will require more expensive above ground storage going forward or we can electrify.
The Ukraine angle is another cheap shot by CBS (state sponsored news). Prices are rising because of Trumps adventurism in the the ME and now that the Houthies will likely control the Bab el-Mandeb Strait, world markets are reacting.
There is nothing stopping US refineries from producing more diesel, you can use both sweet and sour, this is speculators squeezing the markets.
What a great time it should be to electrify heavy transportation. If they can do it in mining and construction, why can't transportation...
Genuinely curious...the output drop in refining from Russia is not also a large factor in diesel (and other Petro) price hikes?
Or are you saying the Ukraine drone strikes have not affected the output at a scale where it matters globally?
> There is nothing stopping US refineries from producing more diesel
Aren't they already producing as much as they can? Which is not sufficient given that globally a significant fraction of refining capacity is offline.
> If they can do it in mining and construction, why can't transportation...
Because supply side. Can't have our oil barons losing out.
Wouldn't it be lovely if either party actually cared about inflation?
24 years ago, I recall diesel being $1.25/gallon, and hamburger meat at a little local grocer for $1/pound any time they had a sale.
Now, even going to Costco, their ground chuck is $6/pound.
Whether they can be credited with caring or not, one party didn't follow Netanyahu into war casually, even fecklessly.
The whataboutists will tell you Bernie would storm the front himself.
Would be great if either party cared about issues which affect ordinary Americans. But they're extraordinarily alienated from the population.
Current US leadership has very much failed ordinary people in the US and allied states.
Incompetence or malice? Both is also possible...
Would be great if americans actually cared about those issues instead of complaining online all the time.
"both sides" is the reason we're in this shit show. It's like comparing a wart to stage 4 skin cancer.