Crack Spreads, Tariffs, and Tight Diesel: What’s Driving Energy Prices This Summer?
Key Takeaways:
Refinery outages and demand surprises are keeping diesel prices firm despite weak crude fundamentals
Ongoing tariff negotiations and OPEC quota shifts add complexity to price forecasts
U.S. shale growth is flatlining, while global heavy crude supply rises—tightening market balance
Watch the full discussion below:
To sign up for the Focus on Fuels podcast, find it on your preferred podcast platform: Apple Podcasts, Spotify, or YouTube.
On this episode of Focus on Fuels, StoneX Energy Desk Director of Market Strategy Alex Hodes and Energy Risk Manager Trevor McClanahan unpack the hidden forces behind recent market moves—and what they could mean for summer prices.
Refinery Outages Are Supporting Strong Diesel Margins
After a quiet stretch, refined products are back in focus. Despite soft expectations entering 2025, refinery outages across the Atlantic Basin have created a supply crunch. As McClanahan points out, “the diesel market is starved.” That’s reflected in time spreads and crack spreads, with elevated refining margins even as inventories remain tight.
China’s Tariff Reversal Could Lift Demand Expectations
Meanwhile, China’s April crude throughput hit its lowest point in over a year. But as U.S.–China tariff talks progress and some levies have been delayed, Hodes suggests we may be finding an interim bottom: “It’s not bullish, but maybe less bearish.” A bounce in Asia’s imports could be next.
OPEC Strategy: Unity Over Output Discipline
Further into the discussion, the conversation shifts to OPEC, where new quota announcements aren’t necessarily what they seem. “It’s about saving face,” says Hodes. Members like Kazakhstan were overproducing. Rather than enforcing cuts, OPEC raised the quota ceiling to restore unity—without changing real output.
Crude Floors and Shale Slowdown Shape the Summer Outlook
On the U.S. side, shale activity is flattening. “We’re seeing layoffs,” says McClanahan, referencing anecdotal reports from the Permian Basin. Official data supports that trend, showing current production falling short of EIA forecasts.
The big picture? Despite few bullish catalysts, refined product strength and flat U.S. production could lift crude back above its recent $55 floor. “Crack spreads may narrow,” Hodes notes, “but that might be more about crude rising than diesel falling.”
For fuel buyers, traders, and risk managers, that means staying alert to refinery restarts, China’s demand curve, and shifting OPEC headlines. As always, StoneX will be watching—and helping clients prepare.
Dive Deeper
Explore the broader implications of tariffs, freight shifts, and trade retaliation on global energy flows in our latest white paper, “Tariffs, Tankers, and Tumbling Prices: The 2025 Oil Market Shake-Up.”
Key insights include:
Why U.S. propane exporters may lose up to 200 Kbbd in shipments as China cuts imports
How re-routed crude and NGL cargoes are reshaping global shipping lanes and margins
Forecasted price pressure on Mont Belvieu propane, with prices expected to fall to 60–66¢/gal
Revised global demand estimates and ton-mile reductions in tanker and LNG shipping activity
These insights and more are regularly covered in the Petroleum Post, StoneX’s premier research package tailored for energy professionals. Subscribe now to receive:
Global inventory and regulatory snapshots
Short-term price modeling and production forecasts
Actionable trading intelligence and weekly updates
---Experts: Alex Hodes, Director of Energy Market Strategy and Trevor McClanahan, Energy Risk Manager
Energy
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
