UN warns fuel crisis could push small businesses out of global trade

Americans faced the most expensive Labor Day weekend ever at the pump as the U.S.-Iran conflict continued to choke oil flows through the Strait of Hormuz, sending diesel to an all-time high and deepening a global shortage of refined fuels that the United Nations warned Tuesday is threatening to squeeze small businesses out of international trade.

Record Fuel Prices and a Refining Crunch

U.S. retail diesel hit a record $5.85 a gallon on September 4 and climbed further to nearly $5.90 by Labor Day Monday, while regular gasoline reached a national average of $4.15 a gallon — the first time it has crossed $4 for the holiday, surpassing the previous record of $3.82 set in 2012, according to AAA data reported by CBS News. Energy Secretary Chris Wright acknowledged the pressure on household budgets in an ABC interview on Sunday but pointed to futures prices trading roughly 35 cents below current levels as a sign of potential relief.voz+1

The pain at the pump reflects a deeper structural problem: the world has enough crude oil but not enough refining capacity to turn it into the diesel, gasoline, and jet fuel the economy needs. U.S. distillate inventories sit about 14 percent below their five-year average and fell in the week to August 21 to their lowest seasonal level since 1951, according to Energy Information Administration data. U.S. refineries are operating at 98 percent of capacity. The New York Harbor diesel crack spread reached roughly $107 a barrel on September 1, dwarfing the $60–$70 range during the June 2022 record.tmgm+1

A Global Fuel Oil Deficit Takes Shape

The refining squeeze extends well beyond diesel. Energy Aspects forecasts a global fuel oil supply deficit of 218,000 barrels per day in the third quarter, the first such shortfall since Q3 2025, as refiners worldwide prioritize higher-margin transport fuels and consume fuel oil as feedstock in secondary processing units. Stocks at major storage hubs in Singapore, Amsterdam-Rotterdam-Antwerp, and Fujairah have fallen roughly 30 percent below three-year seasonal averages, according to data compiled by Reuters.mexicobusiness+1

Middle East crude exports have fallen from about 18 million barrels per day before the Iran war began seven months ago to roughly 11 million bpd now, Reuters reported Tuesday. While Gulf producers have found workarounds — Saudi Aramco resumed loadings from Ras Tanura and exports through Egypt's Sidi Kerir more than doubled in August — Strait of Hormuz transit has dropped to its lowest rate since May, averaging roughly 10 commodity vessels a day over the latest ten-day period. The price of very low sulphur fuel oil in Singapore reached nearly $825 a metric ton as of September 1, up 76 percent since the onset of the conflict, according to bunker pricing platform ZeroNorth.maritimegateway+2

Seven OPEC+ members agreed on September 6 to hold October production quotas unchanged, a decision with limited practical effect since the spare capacity the group holds sits mostly inside the Gulf and would have to transit the very strait that is the problem.tmgm+1

SMEs Face Exclusion From Supply Chains

The United Nations Conference on Trade and Development warned Tuesday that the disruptions risk an "SME exclusion effect," in which rising energy bills, freight rates, insurance premiums, and financing constraints force smaller firms to scale back production, delay investment, or exit global value chains entirely. SMEs account for roughly 90 percent of global businesses and 70 percent of employment, UNCTAD noted.globalbankingandfinance+1

"The risk is not only that trade slows globally. It is that smaller firms can be really pushed out of the value chains, even when overall trade begins to recover," said UNCTAD spokesperson Marcelo Risi. A Brown University indicator estimates the rise in diesel and gasoline prices has cost U.S. households more than $741 each since hostilities with Iran began.voz+1

Morgan Stanley ↘ 0.41% now expects Brent crude to average $100 a barrel in the fourth quarter, while Goldman Sachs ↘ 0.75% raised its Brent forecast by $5 a barrel for December 2026. Consumer and producer price data due later this week, followed by a Federal Reserve meeting on September 15–16, will determine whether the energy-driven inflation surge alters the path of monetary policy.reuters+1