Oil companies make their real money in the ground.

That’s how the business has worked for as long as most investors can remember. When crude prices climb, the companies that pump it collect the windfall.

Refining has usually been the sleepy part of the operation. It turns crude into gasoline and diesel, and in a normal year the margins are thin.

This isn’t a normal year. Crude supply has started to recover, but the plants that turn it into fuel can’t keep up.

You feel that every time a truck delivers something you buy. Now the CEO of America’s biggest oil company has said out loud where the bottleneck is.

Exxon’s fuels business just out-earned its oil fields as diesel stays scarce.

Anton Petrus / Getty Images

Exxon CEO says diesel is the crunch point

ExxonMobil (XOM) CEO Darren Woods told CNBC’s “Squawk Box” on Oct. 30 that the global fuel squeeze now sits with refining, not crude.

“And frankly, diesel is the key crunch point here, because it is so critical to economic growth,” Woods said.

Related: Exxon just showed why gas prices didn’t fall with oil

“Refining capacity is very tight today,” he added.

CNBC said Woods discussed the impact on refining capacity of the Middle East conflict and the Russia-Ukraine war. He pointed to the closure of the Strait of Hormuz and to Ukrainian attacks on Russian refineries.

Diesel now pays refiners more than gasoline

Exxon’s quarter is part of a wider shift. Across the industry, refiners are making more from diesel than from gasoline, because diesel prices have climbed so much faster.

Diesel is up 77% at retail this year, according to AAA data. Gasoline is up 48%.

The gap was even wider a few weeks ago. Diesel had been up more than 83% for the year on Sept. 22, AAA data show.

That gap flows straight to refiners. Diesel crack spreads, the difference between what a barrel of crude costs and what the diesel made from it sells for, reached the high $90s per barrel in late July, according to OPIS.

Exxon’s refineries out-earned its oil fields

The numbers back him up.

Exxon’s Energy Products segment, which includes its refineries, earned $9.05 billion on an adjusted basis in the third quarter, according to its earnings release. Its Upstream business, which pumps oil and gas, earned $7.31 billion.

Refining profit jumped 120% from the second quarter, while upstream earnings fell 20% as Brent crude prices eased, Reuters reported.

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By my math, the fuels business out-earned the oil fields by about 24%. That flips the usual order at an oil major.

Exxon’s U.S. Gulf Coast refineries ran at 100% crude unit utilization, the company said. They also posted their second-highest diesel output on record, Reuters reported.

Here’s how Exxon’s third quarter broke down, according to the release:

• Adjusted earnings: $17.5 billion, or $4.23 a share
• Energy Products (refining): $9.05 billion, adjusted
• Upstream (oil and gas): $7.31 billion, adjusted
• Free cash flow: $19.1 billion
• Shareholder payouts: $9.4 billion, including $5.1 billion in buybacks

Adjusted earnings of $4.23 a share beat the $4.08 analysts expected, according to LSEG data cited by Reuters.

What Exxon earns on every gallon

Here’s the number I’d focus on.

Exxon sold 5.753 million barrels a day of fuels and other energy products in the third quarter.

Divide the segment’s $9.05 billion in adjusted earnings across 92 days of sales, and it comes to about $17 a barrel, by my math.

That’s roughly 41 cents of profit on every gallon Exxon’s fuels business sold. It also works out to about $98 million in refining profit every day.

That figure covers all of Exxon’s fuel products, not just diesel. But diesel is where the shortage is sharpest.

Diesel still costs you $6 a gallon

The national average for diesel was $6.32 a gallon in late October, up $2.70 from a year earlier, according to AAA data cited by FleetOwner.

If you drive a diesel pickup with a 30-gallon tank, a fill-up now costs about $190. That’s about $81 more than a year ago, by my math.

Most people never buy diesel directly. You pay for it anyway, because it moves the trucks, trains and farm equipment behind almost everything on store shelves.

Ukraine’s drones are a big part of the diesel squeeze

Woods’ mention of Ukraine matters more than it sounds. The Russia-Ukraine war is one of the biggest reasons diesel is so tight.

Ukraine’s long-range drones keep hitting Russian refineries. Before the strikes forced Moscow’s hand, Russia was shipping an estimated 800,000 to 1 million barrels of diesel a day, according to OPIS.

Russia banned diesel exports in July after months of attacks, pulling that supply out of an already tight global market, the Associated Press reported.

Europe feels that first. Diesel is far more heavily used there than in the U.S., where most passenger cars run on gasoline.

You still pay for it here. Diesel trades on global markets, so wartime supply losses abroad push U.S. prices up too, CBS News reported.

We’ve seen this once before, in 2022

This is probably the second time this decade that oil companies have made more from diesel than from gasoline.

The first came in 2022, during the fuel fever that followed Russia’s invasion of Ukraine. Diesel carried that rally almost alone, with its crack spread topping $100 a barrel several times that year, OPIS noted.

Gasoline is pulling more of its weight this time, OPIS said. Diesel is still the pinch point.

The 2026 squeeze has already beaten the 2022 peak at the pump. Diesel topped its June 2022 retail record of about $5.82 a gallon on Sept. 4, AAA data showed, Fox Business reported.

Washington’s fix hasn’t moved prices yet

The White House has tried to ease the squeeze.

President Donald Trump said on Oct. 9 that Russia would supply more than 300,000 tons of diesel immediately, 500,000 tons in November and 1 million tons after that, Al Jazeera reported.

Prices kept rising anyway. Diesel climbed another 7 cents after the deal to $6.35 a gallon, The Wall Street Journal reported, citing AAA data, according to Meduza.

Exxon is adding its own supply. “Our expectation is, we’re going to increase distillate throughput by about 100,000 barrels a day, as we go forward,” Woods said.

That’s about 4.2 million extra gallons of diesel-type fuel a day, by my math. It helps, but Woods made clear refining will stay tight.

What it means for your wallet and your portfolio

If you own Exxon, the refining boom is paying you. The stock hit an all-time high on Oct. 30 and is up more than 53% this year, Stocktwits reported.

Exxon declared a fourth-quarter dividend of $1.07 a share, payable Dec. 10. It also plans $20 billion in buybacks in 2027.

Woods argues the gains will last. “These are lasting improvements, not simply the result of favorable prices and margins,” he said in the release.

I’d be more careful. Refining margins this wide usually come from disruption, and disruptions end.

Here’s what I’d watch:

• The Strait of Hormuz. A real reopening would ease crude and fuel flows
• Russian refineries. Fewer Ukrainian strikes would restore diesel exports
• Exxon’s fourth quarter. Refining profit is the clearest read on how tight fuel stays
• Your fuel budget. Diesel near $6 keeps pushing up delivery and grocery costs

For now, the most valuable thing in the oil business isn’t the oil. It’s the capacity to turn it into diesel, and you’re paying for that shortage every time a truck pulls up.

Related: Chevron CEO sends a strong message on oil price and the economy