A growing diesel shortage is threatening to spark a global inflation wave, as tensions between the US and Iran disrupt energy markets. The crisis has led to a decline in diesel supplies and a surge in prices to record levels. According to a report by Al Jazeera, the situation has raised concerns about the potential impact on transportation, shipping, agriculture, and industry, as well as prices and inflation rates.
Data from the International Energy Agency (IEA) shows that global diesel and gasoil availability declined by 1.5 million barrels per day in the second quarter of this year and 1.7 million barrels per day in the third quarter, compared to the same periods last year. The agency also reported that wholesale diesel prices have approached $220 per barrel in Europe and the US, and exceeded $200 in Singapore.
Global diesel and gasoil exports fell by 700,000 barrels per day in September compared to the same period last year, with joint exports from Russia and the Middle East declining by 1.3 million barrels per day to around 820,000 barrels per day. The decline in exports has contributed to the shortage of diesel and gasoil worldwide.
In the US, data from the Energy Information Administration (EIA) shows that distillate fuel inventories, which include diesel, were 13% lower than the five-year average for the week ending September 11. The shortage of diesel has pushed retail prices to record levels, with the average price of diesel reaching $6.30 per gallon, the highest nominal price since the data was first published in 1994.
The diesel crisis has raised concerns about the potential impact on the global economy, particularly in sectors that rely heavily on diesel, such as transportation, agriculture, and industry. The shortage of diesel has also sparked fears of inflation, as higher transportation costs could lead to increased prices for goods and services.
The situation is being closely monitored by energy analysts and policymakers, who are warning of potential disruptions to global supply chains and economic growth. The crisis has also highlighted the need for greater investment in energy infrastructure and diversification of energy sources to reduce dependence on fossil fuels.
As the global economy continues to recover from the pandemic, the diesel shortage and rising prices are adding to the challenges facing businesses and consumers. The situation is likely to remain a key concern for policymakers and energy experts in the coming months, as they seek to mitigate the impact of the crisis and prevent a global inflation wave.
Key points
- Global diesel shortage and rising prices threaten to disrupt transportation, agriculture, and industry.
- Wholesale diesel prices have approached $220 per barrel in Europe and the US.
- US retail diesel prices have reached a record $6.30 per gallon.
