Source: Paul Krugman
by Paul Krugman
“I still sometimes see commentators asserting that fears about the effects of Trump’s disastrous Iran war on energy prices were overstated, because the price of crude oil is “only” $102 a barrel, far above prewar prices but well below the $150-$200 range some analysts warned was possible. But nobody burns crude oil; they burn products refined from crude oil, mainly gasoline and diesel. And here’s what has happened to the price of diesel: Diesel is currently selling at more than $200 a barrel. It’s true that there is always a ‘crack spread’ between crude and diesel, but it’s typically on the order of $20. So the price of diesel is currently roughly what we would normally expect with crude at around $190.” (09/21/26)