U.S. Diesel Retail Prices Hit Record Highs as Major Midwest Refinery Shutdown Intensifies Supply Pressure
nashnova research
U.S. retail diesel has hit a record $6.45 per gallon as one of the Midwest's largest refineries sits idle after a power failure, tightening regional fuel supply and raising the risk of spillover into gasoline prices and inflation expectations.
How high has diesel gone?
AAA's latest data: the national average diesel price has reached $6.45 per gallon, an all-time record.
Bloomberg Intelligence strategist Mike McGlone said $6 diesel echoes the 2008 gasoline shock. This means → fuel-market price stress is approaching the levels of the last energy crisis.
Great Lakes spot diesel is even higher — $240 per barrel, the most expensive in the country.
Why did the Joliet refinery shut down?
ExxonMobil's Joliet, Illinois refinery — capacity 275,000 barrels per day — went offline last Sunday after a power failure triggered its safety flaring system.
The outage was caused by simultaneous failure of both main and backup power lines from utility ComEd; a pump station was also flooded. Power was restored Thursday, but fuel production has not restarted.
In plain terms = the plant was hit by a blackout and flooding at the same time, making recovery far slower than a single-fault shutdown — the timeline remains uncertain.
How much does one refinery matter to the Midwest?
Joliet produces roughly 11 million gallons of gasoline and diesel per day, serving the Midwest market. Its crude-processing capacity is about 6% of Midwest refining and roughly 1.5% of the national total.
GasBuddy's head of petroleum analysis Patrick De Haan expects Ohio faces the highest gasoline-price risk, Wisconsin and Indiana moderate risk, and Michigan and Illinois lower risk — though some areas may still breach $5 per gallon.
This means → Midwest fuel supply depends heavily on a handful of large refineries; any single outage can push regional prices sharply higher.
Could diesel drag gasoline prices up too?
Goldman Sachs analysts Yulia Zhestkova Grigsby and Daan Struyven warned that tight global diesel supply could spill over into the gasoline market.
In plain terms = when diesel margins are higher, refiners prioritize diesel output and squeeze gasoline production — so gasoline supply tightens as well.
If refinery outages and global supply disruptions continue to overlap, rising fuel prices could further lift inflation expectations and pressure interest rates and risk assets.
What comes next?
Whether the Joliet refinery can resume production quickly is the key variable for easing Midwest fuel-supply pressure.
Security tensions around the Strait of Hormuz — the chokepoint between the Persian Gulf and open ocean, through which roughly a fifth of the world's oil passes — continue to underpin crude prices.
This reflects a fuel market caught between domestic outages and external geopolitical risk, leaving limited room for prices to fall.
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