Global diesel fuel crisis looms as Russian oil embargo draws near, Bloomberg reports

23 November 2022, 12:36 AM
The world economy is threatened by the global diesel fuel crisis (Photo:ResoneTIC / Pixabay)

The world economy is threatened by the global diesel fuel crisis (Photo:ResoneTIC / Pixabay)

Almost every corner of the world could face a shortage of diesel fuel in the coming months, further exacerbating inflation and hampering economic growth, Bloomberg reported on Nov. 22.

“This is by far the biggest diesel crisis I have ever seen,” said Dario Scaffardi, ex-CEO of Italian oil refining company Saras SpA, who has worked in the industry for nearly 40 years.

Spot prices for diesel fuel on the New York exchange have increased by 50% over the past year. These are a key benchmark for the global market.

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The report has outlined the following reasons for a possible diesel shortage:

·       limited supply of crude oil;

·       fallout from the COVID-19-related economic slump, which forced the closure of the least profitable oil refining capacities;

·       worker strikes at refineries in Europe

·       market expectations of the embargo on Russian oil products (starts in February 2023).

“The situation could become much more dramatic if the EU refuses (oil products) imports from Russia,” the message says.

“Europe is more dependent on diesel fuel than any other region in the world.”

Earlier media reports noted that purchases of diesel fuel in the EU have doubled over the past month.

By Feb. 5, 2023, the EU is set to introduce a ban on the import of Russian oil products – on which the production of diesel fuel largely depends. An embargo on Russian crude oil will come into force in December 2022.

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