Episode Details

Michael Bernstam of the Hoover Institution warns of a severe global crisis in refined petroleum products, especially diesel, gasoline, and jet fuel. Bernstam explains that the "crack spread"—the cost differential between crude oil and refined diesel—has reached an unprecedented historical peak of over $102 per barrel. This crisis stems from a fifty-year systemic failure, during which no major new refineries were built in the United States or Europe. Compounding this, sophisticated Ukrainian drone strikes have successfully knocked out 40% of Russia's refining capacity, forcing the major oil exporter to ban refined product exports and become an importer. Additionally, China has halted refined exports to meet its domestic demand. Bernstam warns that the resulting global diesel shortage directly threatens agricultural planting, harvesting, and regional food security, particularly for developing nations as winter approaches. (6)