Middle East conflict lifts diesel crack spread from $24 to $69 as oil tops $US105 a barrel, squeezing farm margins
AI Market Summary
Middle East conflict disruptions (including Hormuz constraints) have pushed crude above USD 105/bbl and widened diesel crack spreads, boosting refiners' margins while intensifying a global diesel shortage. Australia's heavy reliance on imported diesel amplifies domestic price volatility, compressing farm and freight profitability and accelerating cost pass-through. The resulting transport-driven inflation pressure raises macro uncertainty, particularly for regional and commodity-exposed sectors.
Impact level
● High
Affected assets
NCCO1OILBRENT2USD/USDT-1.62%
AI Insight · NCCO1OILBRENT2USD/USDTAI Insight
▼ Bearish
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The Middle East conflict has pushed crude oil above $US105 a barrel and widened the diesel “crack spread” to $69 from $24, boosting refinery margins. Australia, which imports about 80% to 90% of its diesel, is particularly exposed to price swings that are cutting into farmers’ profitability. Higher transport costs are also feeding inflation pressures, with the risk that cost increases spread more quickly through supply chains to the wider economy.
