Diesel Fuel Shortages Perfect Storm

... "At the end of the first week of Russia’s military action in Ukraine, with no sanctions yet specific to Russia’s diesel fuel exports, the European diesel price was already at a thirty-year high. It had nothing to do with war. It had to do with the draconian global covid lockdowns since March 2020 and the simultaneous dis-investment by Wall Street and global financial firms in oil and gas companies, the so-called Green Agenda or ESG. Almost on day one of Russian troop actions in Ukraine, two of the world’s largest oil companies, BP and Shell, both British, stopped deliveries of diesel fuel to Germany claiming fear of supply shortages. Russia supplied some 60 to 70% of all EU diesel before the Ukraine war. ... "

-- F. William Engdahl, April 12, US-NATO Sanctions and the Coming Global Diesel Fuel Disaster - Global ResearchGlobal Research - Centre for Research on Globalization

Diesel In ‘Crisis’ Mode As Prices Break Records | OilPrice.com - By Julianne Geiger - April 29

Diesel prices, the lifeblood of industry, have hit a record $5.16 per gallon, trending $1 per gallon higher than gasoline prices, with inventory shortages adding severe pressure and resulting in inflated prices for consumer goods. 

 “While gasoline prices get much of the attention, diesel, which broadly is the fuel that moves the economy, has quietly surpassed its recent record high as distillate inventories, which include diesel and jet fuel, have plummeted to their lowest level in years,” media quoted Patrick De Haan, head of petroleum analysis at GasBuddy, as saying. 

AAA records diesel at $5.18 per gallon as of early Friday. 

De Haan warned that if U.S. distillate inventories fall much further–by five million barrels–they will be lower than at any point in the last two decades.

In the first half of March, diesel and gasoline prices began to soar to record highs as a result of Russia’s invasion of Ukraine and subsequent sanctions, coupled with post-pandemic economic recovery that has led to a continual uptick in demand. 

Loss of refining capacity will make the diesel crisis the most painful for the U.S. Northeast, and there is no indication of a reprieve in the near future, with GasBuddy predicting that diesel prices will remain high and continue to outpace gasoline prices. 

Record-high diesel prices continue to drive up the cost of consumer goods, which all have to be transported by a trucking industry powered by diesel engines.  

There is now concern that a ripple effect could see U.S. diesel prices topping $6 per gallon as Russia cuts off natural gas supplies to Poland and Bulgaria. That could potentially force Europe to shift to other fuels, such as diesel, to fill in gaps. 

Diesel exports to Europe from the Middle East are also now soaring, Bloomberg reports, with the Russia-Ukraine war pushing prices up significantly. 

“I’ve started to use the term diesel ‘crisis’, Tom Kloza, head of global energy research at OPIS, told CNBC. “It clearly is a crisis that’s happening before our eyes. I wouldn’t rule out lines, shortages or $6 [price] in places beyond California. I wouldn’t say it’s a shortage yet. Europe, I think they’re headed for a shortage,” he said. 

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