13-18 DAYS: THE PRACTICAL DIESEL BUFFER… Does It Preclude Bombing Iran?

I am indebted to my new friend who is an energy expert ,and currently working in the Persian Gulf, for explaining why the US is facing a very serious risk of a domestic energy crisis. If ignorance is bliss then I’ve spent my last 71 years happily believing that the conversion of oil to fuel for cars, trucks and planes was a simple process. Boy, was I wrong. The United States is facing a potential crisis surrounding the production of diesel and aviation fuel. According to this person, who has 35 years experience in the oil industry:

The U.S. does not have a month of freely deliverable diesel in a stress event. The headline EIA number shows 106.1 million barrels of total distillate fuel oil stocks and 3.631 million b/d of four-week average distillate product supplied, implying 29.2 days on paper. But that national inventory includes barrels in pipelines, refineries, terminals, regional storage, and operational positions that cannot all be allocated immediately to critical distribution hubs.
Operational estimate: applying a 45%-60% practical deliverability factor to total distillate stocks leaves roughly 48-64 million barrels of usable, allocable diesel-equivalent supply. At 3.631 million b/d, that is approximately 13.1-17.5 days, rounded to 13-18 days.

So let me explain how he reached this conclusion. Think of the diesel buffer as the gap between when supply stops flowing and when the economy starts breaking. Thirteen days is not a comfortable cushion — it’s essentially no cushion at all, because the economy runs on diesel in ways that cannot be deferred.

Diesel is not a lifestyle fuel. It moves every truck on every highway, powers every locomotive, runs every tractor during planting and harvest, and drives every piece of heavy construction equipment. When a family decides gas prices are too high, they drive less. When a freight company decides diesel is too expensive or too scarce, it cannot defer the shipment — the grocery store shelves just go empty. Diesel demand is largely inelastic. The economy cannot negotiate with it the way it can with gasoline.

Let’s use the worst case: 13 days. Thirteen days means that if anything disrupts the supply chain — a refinery outage, a pipeline failure, a crude supply disruption — the effects reach the real economy within two weeks. There is no meaningful time to arrange alternatives. A tanker from a replacement crude source takes longer than 13 days to arrive. A refinery turnaround takes longer than 13 days to complete. The buffer is shorter than the lead time for almost every possible remedy.

The geography makes it worse. The 13-day figure is a national average, which means some regions have more and some have less. The Southeast is particularly exposed, being heavily dependent on the Colonial Pipeline, which is itself a single point of failure that demonstrated its criticality when it was shut down for six days in 2021. Six days is nearly half the total national buffer.

What about aviation fuel? Here is where the two problems collide mechanically, and why it creates a genuine bind rather than just a theoretical tradeoff.

Diesel and jet fuel are not different products from different parts of the refinery. They are competing claims on the same physical fraction of crude oil — the middle distillate cut that comes off the atmospheric distillation column in the same boiling range. Every refinery scheduling decision is, at its core, a daily argument about how to divide that fraction between the two products.

With a 13-day diesel buffer, the refinery cannot let diesel output fall. The economic and political consequences of a diesel shortage materialize too quickly and too severely. Diesel production becomes, in practical terms, the floor that cannot be breached.

Now layer in a wartime demand for military jet fuel. JP-8 is pulled from the same middle distillate fraction. The military’s operational requirements are also non-negotiable — aircraft do not fly on goodwill. So you now have two inelastic demands competing for one fixed supply of middle distillate from each barrel of crude processed.

The refinery’s response to this bind is constrained in every direction:

It cannot simply run more crude. Crude supply itself may be disrupted — this is precisely the scenario the Persian Gulf blockade creates. And even if crude is available, refinery throughput is limited by physical capacity. You cannot run 110% of nameplate capacity.

It cannot shift to lighter crude to get more barrels. Light crude produces proportionally more gasoline and less middle distillate. Running lighter crude when you need diesel and jet fuel makes the allocation problem worse, not better, because you are shrinking the pool of middle distillate that both are fighting over.

It cannot get more middle distillate out of sour crude than the chemistry allows. A barrel of sour crude from the Persian Gulf typically yields around 20–25% middle distillates by volume. That fraction is fixed by the molecular composition of the oil. You can optimize within a range, but you cannot double the yield through operational choices.

Hydrogen becomes a choke point. Making JP-8 from sour crude to military specification requires substantial hydrogen — for sulfur removal, for aromatic ring saturation to meet smoke point requirements, and for freeze point management. Making ULSD from the same sour crude also requires substantial hydrogen — even more, to reach the ≤15 ppm sulfur specification. A refinery’s hydrogen generation capacity is finite. Every cubic foot of hydrogen diverted to jet fuel processing is a cubic foot unavailable for diesel desulfurization. At the margin, maximizing JP-8 production makes the diesel quality problem worse, not just the diesel volume problem.

The certification delay adds time pressure. Switching refinery configuration between maximizing diesel and maximizing jet fuel is not instant. It takes days to a week to restabilize the unit operations and certify the product meets specification. In a 13-day buffer environment, a week of transition time is not a casual cost — it represents a material fraction of the entire safety margin consumed by the act of reconfiguring production.

Under normal peacetime conditions, refineries optimise their middle distillate split based on market prices — jet fuel commands a premium, so they lean toward jet. The diesel buffer stays comfortable and the system works.

The Iran war changes all of that simultaneously in three directions at once:

First, the diesel buffer starts shrinking. Persian Gulf sour crude — even though only 8% of US imports — supplied roughly 17% of the medium-sour grades that US complex refiners prefer for middle distillate production. That quality gap is not easily filled by Canadian heavy or domestic light sweet crude without refinery adjustment. Diesel output drops or becomes more expensive per barrel just as the buffer needs defending.

Second, military JP-8 demand spikes. A naval campaign in the Persian Gulf, sustained air operations, and a mobilised logistics tail consume enormous quantities of aviation fuel. The military doesn’t queue behind civilian demand — it has priority. So the refinery is simultaneously being squeezed from both ends of the middle distillate barrel: the military is claiming more jet fuel from the top, and the diesel buffer is bleeding out from the bottom.

Third, the refinery cannot easily solve this by running harder. As explained earlier, maximising JP-8 from sour crude requires pulling a lighter, narrower distillate cut. This is precisely the action that reduces diesel yield — the heavier tail of the middle distillate that would have become diesel is either lost to the vacuum unit or downcycled to fuel oil. The more aggressively refineries respond to military jet fuel demand, the faster the diesel buffer erodes.

This creates a three-way constraint with no clean solution:

• Protect the diesel buffer → limit JP-8 output → constrain military operations

• Maximise JP-8 for military → draw down diesel buffer → trigger civilian supply cascade before the war ends

• Try to do both → run refineries at maximum utilisation → lose the ability to flex for any further shock, with no margin for equipment failures, maintenance, or a second disruption

The 13-day buffer is what makes this bind acute rather than manageable. With sixty days of diesel inventory, a refinery operator can tolerate shifting the middle distillate split toward jet fuel for several weeks without civilian consequences. With thirteen days, the same shift starts a visible countdown almost immediately. Now do you understand why Donald Trump signed the MoU with Iran?

If the United States decides to renew its bombing campaign of Iran, that would likely trigger the stress event outlined above. Based on that fact I believe that Donald Trump, notwithstanding his threats, will not run the risk of crashing the US economy by bombing Iran again.

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Nima and I discussed the latest developments on the Iran/US front:

Back with Pyotr Kurzin to discuss why Donald Trump signed the MoU with Iran:

Danny Haiphong and I discuss Iran’s latest move to close the Strait of Hormuz:

Mario and I discussed a rumor started by the Pahlavi forces that Mojtaba Khamenei is dead:

I rebutted the claim that Mojtaba Khamenei is dead with Sulaiman and examined the story that the US may sell F-35s to Turkiye: