You know the crude price to the dollar. You also filled a tank this month. For a year those two numbers have stopped speaking to each other -- this conversation explains why.
Dr Tammy Nemeth talks with Dr Richard Norris of Pandreco Energy Advisory about why diesel and heating oil broke from crude in 2026 — and why the Iran war may have exacerbated the situation but is not the cause.
The cause is a refining system hollowed out over fifteen years, with replacements concentrated behind a chokepoint, and a US refinery fleet now running so hard that the next risk is unplanned downtime.
Norris walks through the charts from his September 2026 briefing The Refining Bottleneck: twenty-two years when New York Harbor diesel was crude plus about eleven dollars; 2026 sitting above that line every week; Western closures since 2019; new plants at Dangote, Al-Zour, Jazan, Duqm and Dos Bocas; four restrictions hitting one system with no slack — Iran, Russia, China, and policy; US utilisation at 96–98 percent for thirteen weeks; and the test that will settle it in months: Chinese product coming back versus American plants coming down.
What we cover• Why a 0.99 correlation between Brent and diesel held from 2000 to 2021 — then snapped.• Why 2026 is not a repeat of 2022: a high floor, not two spikes.• The 1.6 million barrels a day the West closed or converted, and why “replacement capacity” in the Gulf and Mexico is not the same as spare capacity in the Atlantic.• How a system with no slack takes four shocks at once.• Why cheaper crude can pile up upstream while the pump stays expensive.• What to watch next: Chinese export quotas, US turnarounds, and whether downtime is planned or forced.GuestDr Richard Norris — petroleum engineer; Pandreco Energy Advisory (Montreal); Fellow, Canadian Global Affairs Institute. Writes on energy, capital and security as Pandreco.https://pandreco.substack.comhttps://www.linkedin.com/in/richardnorris/HostDr Tammy Nemeth — energy historian, analyst and consultant. The Nemeth Report.thenemethreport.comthenemethreport.substack.comhttps://www.linkedin.com/in/t-nemeth-567110246/If this conversation is useful, subscribe and send it to someone who still thinks the wellhead price is the fuel price.
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