Diesel prices have risen 74% in a year, but oil prices haven't risen nearly as much. Among oil-related stocks, who is really making money and who is losing?

The shortage is in 'refining,' not crude

The bottleneck in this energy crisis is refining capacity, not crude. The Iran war and Ukraine's attacks on Russian refineries reduced refining capacity, and while Middle East crude exports have recovered, exports of refined products such as gasoline and diesel have not.

The International Energy Agency's (IEA) October report puts numbers to this asymmetry.

• In September, combined diesel exports from the Middle East and Russia fell by 1.3 million barrels per day (IEA, 2026-10-14)
• Middle East Gulf crude exports recovered to about 75% of prewar levels, but refined product loadings are less than half of prewar levels (IEA, 2026-10-14)
• Diesel refining margins hit a record of about $95 per barrel in September (IEA, 2026-10-14)
• Middle distillate inventories, including diesel, fell ahead of winter against the seasonal pattern

"oil markets may experience more turmoil in the months ahead before any eventual surplus emerges in 2027" — IEA October Oil Market Report (2026-10-14)

Winners: refiners, especially those with a large diesel share

Refiners that buy crude cheaply and sell diesel at high prices are the biggest beneficiaries. Valero's (VLO) Q3 results released this week confirm this.

(Source: Valero 8-K earnings release, 2026-10-22)

Margins tripled and earnings rose more than fivefold. The company also said refinery utilization was "near record highs." Whether crude rises or falls, refiners make money as long as the spread to product prices stays wide.

The ambiguous side: crude-producing majors (XLE's core)

XLE, which many investors buy as 'the energy ETF,' is heavily weighted toward oil and gas producers such as ExxonMobil, Chevron and ConocoPhillips. Their earnings are tied to crude prices, and crude prices carry a fear premium that moves with whether strikes resume. As the report noted, Middle East physical crude is selling at a discount, so if strikes are postponed again, crude futures could fall more than 10%. Exxon and Chevron are integrated companies that also own refining, so their downside is smaller than that of pure producers.

By signal data, XLE's trend is still solid. Closing prices over the last 5 trading days (10/16-10/22) were $68.24, $67.80, $67.97, $68.16 and $67.57, and as of 10/22 the moving averages were in bullish alignment with the 10-day at 67.22, the 50-day at 63.98 and the 150-day at 59.30. The entry condition (entry_ok) was met on all 5 days, drawdown from the high was -1.76%, and the buffer to the trailing stop (trail_buf) was 18.24%, in the 'safe' zone. On 10/23 it rose to $69.33. However, this trend is an extension of crude prices, so unlike refining margins it can break on a single geopolitical headline.

Losers: industries that 'buy and use' diesel

• Trucking and logistics: Most fuel costs are diesel. As long as US diesel stays in the $6-per-gallon range, it is hard to pass it all on through higher freight rates
• Airlines: Jet fuel is a middle distillate like diesel and faces the same shortage
• European chemicals and materials: They are hit by gas and diesel costs at the same time. This matches the report's eurozone PMI at a 4-month low

When will this asymmetry end

Refining margins may already have peaked. An analysis found that European diesel margins fell from about $100 per barrel to near $60 in early October due to higher freight and crude costs (IEA cited by Webull, 2026-10). US Gulf Coast margins in October are also about 13% below the September average. On top of that, Russian diesel is scheduled to arrive in the US on 11/7 for the first time since 2023.

On the other hand, diesel margins usually strengthen seasonally from October through February on heating demand (MarketGauge, 2026-07). The IEA also sees the supply shortage lasting into 2027. In sum, 'record margins' have passed, but 'above-normal margins' are likely to persist throughout the winter.

So what should investors do

• If you want to invest in energy, mixing in some refining exposure rather than holding only crude-heavy XLE makes you less vulnerable to a strike-postponement scenario. US refiners (Valero, Marathon Petroleum) or refining ETFs (such as CRAK) serve this role
• If you already hold XLE, keep it since the signal trend remains valid, but hold off on adding ahead of strike-related news around the 11/3 midterms
• If you are buying refiners now, buy in installments since margins are coming off their peak. The indicator to confirm is whether US retail diesel falls below $6 per gallon. If it does, that signals margin compression is getting underway
• Transport and airline stocks: Don't rush to buy the dip until diesel prices turn down

You can find detailed charts and signals for other tickers on the /signals dashboard.