Sep 21, 2026 · 21 min
Oil’s hidden buffers are running dry
The World is Running Out of Fuel
Depleted reserves, disrupted refining and a closed Strait of Hormuz could turn a temporary fuel shock into persistent inflation.
- 1Strategic reserves, commercial inventories, sanctioned oil and weaker Chinese demand initially softened the war’s impact on crude prices.
- 2Diesel shortages are intensifying as inventories fall, refineries shut down and transport costs spread through the economy.
- 3Businesses are choosing between lower profits and higher prices, making fuel inflation harder to reverse.
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Businesses confront the choice between protecting customers with lower profits and passing sharply higher fuel and material costs through.
The brief
Oil prices stayed below worst-case levels because strategic reserves, commercial inventories, sanctioned oil and weaker Chinese demand cushioned the disruption. Benoît Morenne says those workarounds are now fading.
A failed ceasefire and the renewed closure of the Strait of Hormuz removed hopes that an oil glut was imminent, while refinery outages and attacks on Russian capacity tightened supply.
The squeeze is clearest in diesel, which powers trucks and freight. Morenne explains why Venezuela cannot quickly replace lost supply, and why repairs or more Chinese production offer limited relief.
Owen Tucker-Smith reports that businesses are splitting between absorbing lower profits and passing higher fuel and material costs to customers, including costs for plastic resin.
A brief summer price decline offered false reassurance; renewed tensions and $6 diesel left companies without a reliable baseline for forecasting costs or demand.
Featuring
Benoît Morenne
Strait of Hormuz
Venezuela
Donald John TrumpListen to the full episode and explore every guest, topic, and moment on PodLume.