While Everyone Is Concerned About Gas Prices, Diesel Drives Inflation More Than Anyone Thinks
The fuel that powers the global economy was scarce even before Russia invaded Ukraine.
Analysts now believe there may be a shortage of diesel fuel in certain areas. Prices could also remain high, even though oil prices fall.
Inflation is also being stoked by higher diesel fuel prices.
“I have started to call diesel crisis the diesel crisis. It is clearly a crisis that’s unfolding before our eyes. Tom Kloza, head of global energy research at OPIS, said that he wouldn’t rule out shortages, lines or $6 [price] elsewhere than California. “I wouldn’t say there’s a shortage at the moment. Europe, I believe they are headed for a shortage.
If prices rise too much, a drop in demand could mitigate that outcome. After Covid caused havoc in the oil industry, the low supply of diesel fuel resulted from a decrease in refining capacity around the world.
Kloza stated that it was the middle of the barrel, diesel — that is being hit the hardest.
The oil price has been volatile since the invasion of Russia in Ukraine in February. West Texas Intermediate crude oil futures traded at $107 per barrel on Wednesday after reaching $130.50 due to concerns about Russian sanctions.
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