Diesel Shortages Are Now “Widespread”


This is going to have an effect on everything, from the food supply to the…

 by Mac Slavo of SHTFplan

Diesel shortages have become apparent to those who utilize the fuel and many are calling those shortages “widespread.” This is going to have an effect on everything, from the food supply to the cost of goods and services going forward.

In the United States, refiners currently receive roughly an average of more than $150 per barrel from the sale of gasoline and diesel at wholesale prices, while paying only around $100 to purchase crude. The indicative 3-2-1 margin of $50 per barrel is based on the assumption a refinery produces two barrels of gasoline and one barrel of diesel from refining three barrels of crude. –ZeroHedge

Global stocks of refined petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand, especially for the diesel-like fuels used in manufacturing and freight transportation. The result has been a surge in prices refiners receive for selling fuels compared with the prices they pay for buying crude and other feedstocks, boosting their profitability significantly.

Because of the shortage, diesel prices have hit new record highs.

“Diesel supply is short all over the world due to sanctions against Russian oil and much higher post-pandemic demand as supply restocking takes place,” says Peter Meyer with S&P Global Commodity Insights.

“Certain areas of the country have seen shortages already and we expect that to continue. Supplies at New York Harbor–a hub for diesel distribution–are at a 30-year low,” says Meyer according to AgWeb. “As such, the East Coast of the U.S. has been hit especially hard, resulting in diesel prices above $6.00 per gallon in that area, well over the equivalent of $250 per barrel.  Exports of U.S. gasoline, diesel, and jet fuel to Latin America is also very high, adding to the tightness.”

There’s a higher demand around the globe for products like diesel, heating oil, and jet fuel, which are known as “middle distillates” since they are made from the middle of the boiling range when oil is turned into products. The U.S. currently exports more than 1-million barrels of distillates every day to countries such as Mexico, Brazil, and Chile.





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