{"id":77216,"date":"2026-08-17T11:55:35","date_gmt":"2026-08-17T11:55:35","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/08\/17\/posthaste-an-energy-shock-much-bigger-than-the-oil-is-brewing-out-there\/"},"modified":"2026-08-17T11:55:35","modified_gmt":"2026-08-17T11:55:35","slug":"posthaste-an-energy-shock-much-bigger-than-the-oil-is-brewing-out-there","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/08\/17\/posthaste-an-energy-shock-much-bigger-than-the-oil-is-brewing-out-there\/","title":{"rendered":"Posthaste: An energy shock much bigger than the oil is brewing out there"},"content":{"rendered":"

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Oil prices have ebbed and flowed this summer with each new twist in the Iran war, but products made from crude \u2014 the fuels that run our world \u2014 have marched steadily higher. <\/p>\n

Gas and diesel prices decoupled from crude in July, limiting any relief from lower oil prices, and according to economists, they are likely to stay high, even after oil starts flowing again through the Strait of Hormuz. <\/p>\n

Why are oil product prices rising more than oil itself? That has to do with something called a \u201ccrack spread\u201d and a series of supply disruptions that are uniquely putting the squeeze on oil product markets. <\/p>\n

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BofA Global Research describes it as a \u201cperfect summer storm.\u201d <\/p>\n

\u201cThree of the world\u2019s four major refining hubs remain impaired for one reason or another,\u201d said strategists in recent note. <\/p>\n

The closure of the Strait of Hormuz and strikes on Middle East refineries during the Iran war has disrupted more than 20 per cent of global seaborne oil product trade this year. Unlike oil, the loss of these flows has not been offset by the use of pipelines, said Capital Economics. <\/p>\n

Meanwhile, Ukraine drone attacks have knocked more than 40 per cent of Russia\u2019s refining capacity offline, which is about three per cent of the global total. Russia is exporting more crude, but has banned gas and diesel exports and has actually been forced to import these products. <\/p>\n

China, which has helped ease the loss of crude oil to the market by reducing its imports, has also worsened the strains of the refined product markets by cutting fuel exports, worried about its own domestic supply. <\/p>\n

That leaves the United States as the only major refining hub \u201copen for business,\u201d but record exports are drawing down already tight U.S. inventories. <\/p>\n

These supply disruptions have pushed crack spreads \u2014 the difference between the price of oil and the products that are derived from it, such as gasoline, diesel and jet fuel \u2014 to record highs. Gas prices, for example, are up 98 per cent this year, compared to the 44 per cent rise in WTI crude oil prices. <\/p>\n

BofA strategists said the middle distillate markets have tightened rapidly, with diesel and gasoil cracks up more than 85 per cent since June and jet fuel cracks surging nearly 140 per cent. <\/p>\n

\u201cWith the harvest season already under way, diesel demand is set to accelerate just as inventories across the U.S., Europe, and Asia sit near multi-year lows,\u201d they said. \u201cThe result is a market that is about to enter its strongest seasonal demand period with very little margin for error, particularly because global gasoline also remains exceptionally tight.\u201d <\/p>\n

Capital Economics expects an increase of traffic through the Strait of Hormuz to lower the price of crude oil over the remainder of the year, but unless Ukraine pulls back from attacks on Russia\u2019s energy infrastructure, oil product prices could remain higher well into 2027. <\/p>\n

How is this affecting inflation? <\/p>\n

Based on just oil prices, fuel inflation would have contributed 0.6 percentage points to headline inflation in developed economies in July, said Capital. However, because of the surge in crack spreads, fuel inflation is probably contributing closer to 1 percentage points. <\/p>\n

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Sign up here to get Posthaste delivered straight to your inbox.<\/strong><\/em> <\/p>\n

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Who needs income if you have wealth? That\u2019s the thinking of Bank of America strategists who blame (in part) a smoking hot equity market for the collapse of labour force participation among older workers in the United States. <\/p>\n

The participation rate of workers 55 or older never really recovered after the shock of the pandemic, and remained range-bound until the summer of 2024, they said. Since then it has gone downhill, as the S&P 500 gained 35 per cent over the past two years. <\/p>\n

\u201cThe resulting surge in wealth has likely made retirement an easier choice for many,\u201d said the strategists. <\/p>\n

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  • Today\u2019s Data:<\/strong> Canada inflation for July, international securities transactions, United States Empire Manufacturing<\/li>\n<\/ul>\n
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    • Why are the U.S. and Japan trying to prop up the yen and what does it mean for Canada?<\/li>\n
    • Clocks are ticking on mortgage refinancings<\/li>\n
    • How can John, who must convert his RRSP to a RRIF at 71, reduce taxes if he keeps working?<\/li>\n<\/ul>\n
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      \"\" <\/p>\n

      Over his 40-year career, portfolio manager Tony Genua built a reputation as a steadfast believer in growth investing. In July, he came out of a brief retirement to join Ninepoint Partners LP where, as a partner and senior portfolio manager, he\u2019ll oversee the Global Select Fund, which aims to harness the growth potential of a concentrated portfolio of international companies. The Financial Post talked with Genua about how he\u2019ll manage the fund, his stock-picking philosophy and where he sees opportunities in the market. Read more <\/p>\n

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      <\/span>\"\" Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country\u2019s most important sectors. Sign up here. <\/p>\n

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      Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at <\/span>wealth@postmedia.com<\/span> with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/span><\/div>\n
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      McLister on mortgages<\/h2>\n

      Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page for Canada\u2019s lowest national mortgage rates, updated daily. <\/p>\n

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      Financial Post on YouTube<\/h2>\n

      Visit the Financial Post\u2019s YouTube channel for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more. <\/p>\n

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      Today\u2019s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.<\/em> <\/p>\n

      Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com . <\/p>\n

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      Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here<\/em> <\/p>\n

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      Posthaste: An energy shock much bigger than the oil is brewing out there<\/a>
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      2026-08-17 11:55:35<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

      Oil prices have ebbed and flowed this summer with each new twist in the Iran war, but products made from crude \u2014 the fuels that run our world \u2014 have…<\/p>\n","protected":false},"author":2,"featured_media":77217,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-77216","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/77216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=77216"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/77216\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/77217"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=77216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=77216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=77216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}