A major refinery in the US Midwest went offline this week after a power outage, adding to global refining disruptions as US diesel prices reach record highs.
Exxon Mobil shut its 275,000-barrel-a-day Joliet refinery in Illinois on Sunday after a power failure triggered the facility’s safety flare, Reuters reported. A Thursday filing also disclosed that floodwater had overwhelmed a pump at the plant.
Exxon traced the power outage to ComEd’s primary and secondary lines supplying the refinery and said it had fully restored electricity by Thursday. Power restoration, however, does not mean fuel production has resumed.
Located about 40 miles southwest of Chicago, Joliet can produce about 11 million gallons of gasoline and diesel daily, primarily for Midwest consumers. Its processing capacity represents roughly 6% of Midwest refining capacity and 1.5% nationally.
A prolonged shutdown would tighten regional fuel availability and risk further price increases across Illinois, Indiana, Ohio, Wisconsin, and Michigan.
“There’s an additional likelihood of further price increases in the Great Lakes. Gas: OH is at high risk of largest jump, WI, IN are at med risk of moderate jump, MI, IL at low/med risk but could go past $5/gal. diesel: will likely jump in most these areas mod/large jump,” Patrick De Haan, head of petroleum analysis at GasBuddy, wrote on X.
Goldman Sachs commodity experts Yulia Zhestkova Grigsby and Daan Struyven warned earlier this week that the global diesel crisis could tighten gasoline supplies as refiners prioritize higher-margin diesel production.
Bloomberg Intelligence senior commodity strategist Mike McGlone warned on Monday that “$6 diesel echoes 2008 gasoline shock.”
Globally, the impact is significant. Current supply losses include refinery disruption in the Middle East linked to the Iran war and reduced Russian diesel availability following Ukrainian attacks on refining infrastructure and export restrictions. All these elements add to the geopolitical risk premium, but they are magnified by the absence of spare refining capacity and the limits to regional supply.
Middle Eastern refinery disruptions have risen to almost 3.0 million barrels per day. Saudi Arabia’s Jizan refinery, with a capacity of 400,000 barrels per day, was one of the facilities where exports slumped. Additionally, Russian exports have plummeted. Russia was one of the world’s largest diesel exporters, but its seaborne diesel exports in June 2026 fell to 426,000 barrels per day from 827,000 barrels per day a year earlier. Refinery damage, domestic-supply priorities and export restrictions all affected the stability of an already fragile market.
However, these disruptions explain the timing of the latest surge, but they do not explain why importing economies entered the shock with so little capacity to absorb it. That is where interventionist policies have created the biggest damage.
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Learn More:
https://www.zerohedge.com/energy/midw…
https://www.foxla.com/news/gas-prices…
https://www.zerohedge.com/geopolitica…
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