47 mins ago
Diesel Prices Surge as Refinery Disruptions Tighten Global Fuel Markets
Diesel is becoming more expensive around the world.
This is not only because there is less crude oil available.
Many refineries that turn crude oil into diesel and other fuels have been damaged or restricted.
Wars and shipping disruptions have made it harder to move oil and fuel.
Some countries have also banned Russian fuel imports, while Russia has limited some exports.
Diesel prices reached record levels in the United States and France.
Countries still have some oil reserves, but those reserves are shrinking.
Trucks, farms, construction companies, and factories cannot quickly switch away from diesel.
Prices could fall if oil shipments through the Strait of Hormuz return to normal.
Global crude supply is estimated to be short by about 10 million barrels per day amid disruptions linked to conflicts in the Middle East and Ukraine.
Oil shipments through the Strait of Hormuz were initially disrupted, while Saudi exports and other tanker routes have also been affected.
Diesel prices reached records of $6.52 per gallon in the United States and 2.41 euros per litre in France.
Refinery damage, bans on Russian petroleum products, and fuel-export restrictions have created a shortage of refined products rather than crude alone.
A reopening of the Strait of Hormuz could ease prices, but diesel demand is expected to remain relatively resilient in the short term.
- Who
- Oil producers, refineries, fuel buyers, governments, and consumers are affected; the International Energy Agency and Rystad Energy provided assessments.
- What
- Diesel and other fuel prices are surging as crude supplies, shipping routes, and refining capacity are disrupted.
- Where
- The disruption is global, with particularly strong exposure in Europe, the United States, the Middle East, and major Asian oil-shipping routes.
- When
- The article reports recent conditions, including record prices on Monday in the United States and Sunday in France.
- Why
- Conflicts, attacks on refineries, shipping restrictions, sanctions, and export bans have reduced the supply of refined petroleum products.
Key facts
- Estimated crude shortfall
- About 10 million barrels per day, according to French officials cited in the article.
- Pre-conflict global consumption
- Approximately 105 million barrels of crude oil per day.
- United States diesel price
- Record average of $6.52 per gallon, according to AAA.
- France diesel price
- Record average of 2.41 euros per litre, or about $10.40 per gallon.
- Observed oil-stock decline
- About 507 million barrels below pre-war levels, according to the International Energy Agency.
- Main refining problem
- A global shortage of refining capacity is limiting diesel and other petroleum products.
- Most exposed region
- Europe, which is a net importer of diesel.
Quotes
Paul Krugman
Nobel Prize-winning economist
“Diesel demand is relatively insensitive in the short term because trucking, agriculture, construction and industry have few immediate alternatives.”
NDTV
“The current world energy crisis, then, is largely a crisis in petroleum products, refined from crude oil, rather than in petroleum itself.”
NDTV
Sources
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