FAST FIVE: Most Crucial Industrial Fuel Faces Global Shortage
Refining capacities are tight, and stockpiles are being depleted as the Northern Hemisphere cold season begins.
Due to supply constraints, diesel prices in many markets currently demand a hefty premium. Mark Finley, an energy fellow at Rice University's Baker Institute of Public Policy, explained to Bloomberg that elevated diesel prices could cost the US economy $100 billion: “Anything and everything that gets moved in our economy, diesel is there.
Global export markets are so tight right now that emerging market countries are being squeezed out of purchasing industrial fuel, such as Pakistan. “It's certainly the biggest diesel crisis that I have ever seen,” Dario Scaffardi, a former chief executive officer of the Italian oil refiner Saras SpA who spent four decades in the industry, told Bloomberg.
Meanwhile in Europe, shipping disruptions and worker strikes have also eaten into refinery production.
Any export ban from the US would cause unwanted market gyrations. Labor strikes have also exacerbated diesel shortages across Europe at major refineries.