Oct 1, 2026 · 37 min · 15 segments
The Schachter Catch the Energy Conference is coming to Calgary October 17. Josef has offered our listeners $100 off the annual Schachter Energy Report using coupon code 'CTE26' at the link below. You…
Josef SchachterGuest
Arlen HansenHost
You know, I wanna touch, touch base on something that you just brought up about the diesel market, okay? 'Cause I don't think a lot of people are talking about this very often, but I'm starting to seeing sold out signs in the States.

Now, I haven't seen any in Canada yet, but in the States I've seen signs of diesel being sold out.

A, how is diesel made and brought to the market, and is this even a bigger problem than oil? So like because I know that diesel's being used for, like, the big infrastructure, the big transportation, the big movement of goods and services.

Uh, d- diesel, y- the refineries are running around, you know, 97, 98% of capacity in the States.

So they can go and produce as, you know, they, the, the, with the heavier crudes you can produce more diesel, with the lighter crude you can't.

You know, so wherever they can go to buy heavier crudes that go into the Gulf Coast refineries and into the Midwest refineries, they're doing it.

The problem is president is saying, "We're gonna stop shipping diesel to the rest of the world." And right now, the, the, because it's the highest profit margin, you know, the, the, they, the, the, the refiners look to say, "Okay, what oil do we buy to get the best profit out of every barrel that we produce?"

All of a sudden the government says you can't sell the highest profitable item to the rest of the world, then all of a sudden you stop producing diesel because you d- you know, once you produce nothing, you filled all the storage tanks, then, then you're stuck 'cause you can't-

... that marginal barrel of, of oil that's cr- that's diesel doesn't have a home.

And so all of a sudden that means you're not gonna produce gasoline and jet fuel and residual 'cause your utilization of your refineries has to come down.

Because if diesel is a product that comes out of that stream and you don't have a place to put it, you gotta shut down and slow down everything.

You know, I wanna touch, touch base on something that you just brought up about the diesel market, okay? 'Cause I don't think a lot of people are talking about this very often, but I'm starting to seeing sold out signs in the States.

Now, I haven't seen any in Canada yet, but in the States I've seen signs of diesel being sold out.

A, how is diesel made and brought to the market, and is this even a bigger problem than oil? So like because I know that diesel's being used for, like, the big infrastructure, the big transportation, the big movement of goods and services.

Uh, d- diesel, y- the refineries are running around, you know, 97, 98% of capacity in the States.

So they can go and produce as, you know, they, the, the, with the heavier crudes you can produce more diesel, with the lighter crude you can't.

You know, so wherever they can go to buy heavier crudes that go into the Gulf Coast refineries and into the Midwest refineries, they're doing it.

The problem is president is saying, "We're gonna stop shipping diesel to the rest of the world." And right now, the, the, because it's the highest profit margin, you know, the, the, they, the, the, the refiners look to say, "Okay, what oil do we buy to get the best profit out of every barrel that we produce?"

All of a sudden the government says you can't sell the highest profitable item to the rest of the world, then all of a sudden you stop producing diesel because you d- you know, once you produce nothing, you filled all the storage tanks, then, then you're stuck 'cause you can't-

... that marginal barrel of, of oil that's cr- that's diesel doesn't have a home.

And so all of a sudden that means you're not gonna produce gasoline and jet fuel and residual 'cause your utilization of your refineries has to come down.

Because if diesel is a product that comes out of that stream and you don't have a place to put it, you gotta shut down and slow down everything.
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