ULSD Diesel Intelligence Report

ULSD diesel at $3.15/gal has retreated 33% from the March crisis peak as Hormuz reopening talks advance, but physical fundamentals remain the tightest in decades. Global diesel supply losses of 3-4 mb/d persist, US distillate inventories are 11% below the 5-year average, and OECD crude stocks are at 2003 lows. The EIA prices diesel at $3.34/gal wholesale for 2026 in its base case, but the gap between falling futures and tight physicals creates a window for buyers. If Hormuz talks stall, a sharp reversal to $4.00+ is the dominant tail risk. The procurement call: opportunistic pricing now, with layered hedges against headline-driven spikes.