Freight carriers face a prolonged period of high diesel prices and supply chain vulnerabilities as aging infrastructure and tight global fuel markets continue to squeeze operating margins.
- U.S. operational refineries have dropped from over 300 in 1980 to 128 today, with plants running above 95% capacity leaving little margin for maintenance or unexpected disruptions.
- Geopolitical conflicts and maritime insurance risks in key shipping lanes like the Strait of Hormuz and Red Sea have severely delayed refined fuel distribution and inflated shipping costs.
- Fuel merchants caution that fleet managers frequently miscalculate expenses by prioritizing headline discounts rather than comparing actual net fuel prices across regional markets.
- Forward curves for crude oil near $90 to $100 per barrel indicate that high fuel costs will persist into 2027, making supply chain diversification and a focus on controllable factors essential for fleet survival.
Motor carriers need to brace for prolonged diesel price volatility and elevated operating costs that stretch well into 2027, driven by refining constraints, geopolitical chokepoints and structural supply deficits, according to industry executives and analysts at the WEX OTR Summit in Ponte Vedra, Fla., this week.
Denton Cinquegrana, director of energy research at Dow Jones Energy, noted that retail diesel prices hover in the range of $6.25 to $6.30 per gallon, well above the historical norm of about $4. With forward crude curves showing West Texas Intermediate pushing $90 a barrel, and Brent crude topping $100 for 2027 contracts, Cinquegrana warned that quick normalization is unlikely.
“We could say this is over tomorrow and it’s still going to take several months [before any impact is felt],” Cinquegrana said. “Inventories here in the U.S. and globally will need to be filled, too. That’s going to keep a floor under demand for the foreseeable future”.
Global chokepoints have hindered refined fuel distribution. While crude oil continues to flow, attacks on Russian refining infrastructure and rising risks in the Red Sea and Strait of Hormuz have trapped finished product, extended shipping routes by weeks and inflated tanker insurance premiums.
Domestic refining limits further compound the problem. Chuck Ryan, president and CEO of independent truck-stop network Ambest, emphasized that domestic infrastructure has shrunk over the last several decades even as national fuel consumption climbed.
“In 1980, there were more than 300 refineries operating in the U.S. Today that number is 128,” Ryan said, pointing out that no new major refinery has been built in the country since 1977.
And it's not as simple as ramping up production, with Ryan cautioning that U.S. plants running at above 95% capacity leave minimal margin for scheduled maintenance or unexpected shutdowns.
Panelists were skeptical that temporary government intervention, like releasing heating oil reserves or permitting untaxed off-road red diesel on highways, offers meaningful relief.
"They're drops in the bucket," Cinquegrana said. "These are Band-Aids on a shotgun wound."
Regional vulnerabilities are especially acute in the Northeast, which has operated hand to mouth following the 2019 closure of the Philadelphia Energy Solutions complex and subsequent restrictions on Russian distillate imports. As winter approaches, competition for space between heating oil and diesel on the Colonial Pipeline could trigger localized shortages, Ryan warned.
The net price trap
Amid mounting retail costs, fuel merchants warned that fleet managers frequently miscalculate their expenses by chasing headline pump discounts rather than calculating actual net cost.
Meghann Erhart, chief commercial officer at convenience chain Maverik, explained that wide discrepancies in state tax rates, transportation logistics and terminal proximity mean “all gallons are not created equal."
“The misconception is that the depth of the discount shows you’re buying well,” Erhart said, describing an instance where a carrier left for a competing brand offering a discount near $1 per gallon, only to end up paying 7.5 cents more per gallon in final net fuel price.
Rob Nordlander, head of B2B commercial sales at Circle K, echoed the emphasis on net cost while urging operators not to overlook the total value of service stops, citing driver turnaround times, well-maintained facilities and dependable pump infrastructure.
“Price is super important, but a sale isn’t just transacting a dollar,” Nordlander said. “How is your driver being taken care of? How much time is a stop taking? Does everything work like it’s supposed to?”
As carriers navigate market swings over the coming year, panelists advised fleet managers to diversify their fuel vendor networks to protect against localized pipeline outages, leverage data analytics and maintain close, human relationships across their supply chains.
