oil refineries are “powerless” to produce the amount of diesel fuel the world needs – Kommersant

Global producers of diesel fuel are not able to produce it in the quantity required by the world. Agency experts say this Bloombergwarning that this situation threatens to continue to increase prices for this product and may, given the demand for fuel in industry and transport, have a negative impact on the economic situation of countries around the world.

In the United States, the agency recalls, prices for diesel futures contracts reached a record for this time of year – above $140 per barrel. Against this background, experts say, even the sharp rise in oil futures, which reached $90 per barrel in London on Friday, pales into insignificance.

The situation may well get worse with the recent decision by Saudi Arabia and Russia to extend restrictions on oil production, including the grades most popular with diesel producers, until the end of the year. This was confirmed by Toril Bosoni, head of the oil market division of the International Energy Agency (IEA). “There is a risk that the current ongoing shortage… in the market will continue into the winter months. Oil refiners can’t cope,” he noted.

The reduction in production, experts say, could have serious economic consequences. “Diesel is the fuel that eighteen-wheelers use to deliver goods from factories to the market. So if prices go up, the high cost of transportation is passed on to both companies and consumers,” recalls Clay Sigley of Rapidan Energy Group.

However, the situation could be even worse, given that the growth in demand for diesel fuel cannot be compared with the growth in demand for other types of fuel. According to IEA calculations, the growth in demand for diesel fuel this year is approximately 100 thousand barrels per day, against an increase of 500 thousand barrels for gasoline and more than 1 million barrels for aviation fuel.

Victor Buk