Tag Archives: David Blackmon

Why Are Diesel Prices So High?

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On Friday, David Blackmon’s Energy Additions posted an article at Substack explaining why diesel prices are so high.

Here are some of the reasons:

The Shock: Two Wars Took Diesel off the World Market

…According to the International Energy Agency (IEA), net diesel exports from Russia and the Persian Gulf in August were 1.6 million barrels a day lower than in February. In February, those two regions accounted for almost 45 percent of the diesel traded by sea.

…But Why do These Wars Affect Diesel Prices in the United States, Especially Prices in the Midwest?

A similar question is: if the United States is the world’s largest producer of oil and we are currently a petroleum exporter, why are we seeing these high prices, especially high diesel prices? The answer is that oil markets are global. The diesel market is global, and with the loss of a substantial amount of diesel from Russia and the Middle East, global diesel prices are very high.

…But Why Now? Why are These Wars Increasing Prices Now and Not a Few Months Ago?

The blunt answer is that the world is running out of excess capacity and shock absorbers in the oil system.

Diesel prices jumped when the Iran war began, from $3.90 a gallon on March 2 to $5.64 on April 6, then eased to $4.58 by July 6 (EIA). Since then, they have climbed nearly $2.

The article concludes:

If You Want Sustainably Lower Diesel Prices, We Need Peace in Ukraine and the Middle East

Diesel prices will come down for good when the diesel the wars took off the market comes back: when Russia’s refineries are repaired and its exports resume, when tankers can move freely through the Strait of Hormuz and the Red Sea, and when Gulf refineries are running again.

An export ban does not add a single barrel of diesel to the world market. It moves barrels from Rotterdam and Lima to Chicago, and it raises the world price that sets what Americans pay on the East and West Coasts.

Until peace comes, policymakers should focus on adding supply and moving it to where it is needed: keeping U.S. refineries running, and waiving the Jones Act so Gulf Coast diesel can reach the East Coast by ship. This crisis also shows the cost of letting the shock absorbers run down. The United States entered it with thin diesel stocks, a depleted Strategic Petroleum Reserve, and about 400,000 barrels a day less refining capacity than it had at the start of 2025.

The world needs peace and America needs refining capacity. Those two things will do more to bring diesel prices under control than anything else.

Becoming Supply Chain Independent In The Modern World

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On Tuesday, David Blackmon posted an article at Substack about America expanding its production of rare earth metals.

The article reports:

The United States is finally starting to dig itself out of a rare earth metals hole it spent decades digging. The effort got a boost on July 29, when Energy Fuels announced that construction has begun on a commercial-scale expansion at its White Mesa Mill in Utah. The expansion of the only fully licensed and operating conventional uranium processing facility in the United States, will enable the plant to produce heavy rare earth oxides at meaningful volumes. This key event, along with other developments in the U.S. and allied nations like Australia, represent concrete steps toward breaking China’s chokehold on the materials that power everything from electric vehicle motors and humanoid robots to advanced weapons systems and data centers.

Heavy rare earths are the severe pinch point in current Western permanent magnet supply chains. These elements give high-performance magnets the coercivity and heat resistance needed for smaller, lighter, and more powerful motors. Energy Fuels already has commercial capacity for up to 1,000 tons per year of separated neodymium-praseodymium (NdPr) oxide, the lighter rare earths that form the bulk of most magnets. The new circuits will add roughly 20 tons of terbium, 120 tons of dysprosium, 140 tons of samarium, 20 tons of europium, and 140 tons of gadolinium annually, with terbium and dysprosium online by the end of 2027 and the rest by the end of 2028.

This is one of those articles I don’t claim to understand. However, I remember what it was like trying to buy a car in 2022. Because Covid had so totally disrupted the supply chain, the wait time for some cars was ridiculous, and there were surcharges on the purchase of almost all cars. America not only needs to be energy independent, we need to be rare earth independent, drug independent, and self sufficient in every way possible. Trade with other countries is fine–depending on other countries that may not have our best interests at heart for things that are essential to our survival is not fine.