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“Gas Stations Will Run Dry”: Catastrophic Scenario For Diesel Emerging According To World’s Biggest Energy Traders
Russophile.org ^ | 3-22-2022

Posted on 03/22/2022 4:14:26 PM PDT by blam

While the world has been obsessively focused on crude oil and gasoline in recent weeks, we instead alerted readers to a far more dire scenario playing out in diesel, a source of energy which is absolutely critical in keeping the “just in time” world running on time.

As a reminder, here are some of the articles we have published on the topic in recent weeks, many even before the Ukraine war:

Fast-forward to today, when our warning was echoed by the heads of one of the largest commodity trading houses and the biggest independent oil trader who were speaking at the FT Commodities Global Summit in Lausanne, Switzerland on Tuesday.

The corporate leaders estimated that as much as 3 million barrels of oil and its products a day could be lost from Russia as a result of sanctions, in line with previous estimates, and warned that global markets face a squeeze on diesel with Europe most at risk of a “systemic” shortage that could lead to fuel rationing.

“The thing that everybody’s concerned about will be diesel supplies. Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East,” said Russell Hardy, chief of Switzerland-based oil trader Vitol. “That systemic shortfall of diesel is there.”

Those imports mean that Russian supplies account for about 15% of Europe’s diesel consumption, according to the FT which carried their comments.

Hardy said the shift to more diesel consumption over gasoline in Europe had helped to create shortages of the fuel. He added that refineries could boost their diesel output in response to higher prices at the expense of other oil-derived products to shore up supply, but warned that rationing was a possibility.

Torbjorn Tornqvist, co-founder and chair of Geneva-headquartered Gunvor Group, added: “Diesel is not just a European problem; this is a global problem. It really is.”

Tornqvist also warned that European gas markets were no longer functioning properly as traders faced huge demands from banks for cash to cover hedging positions. “I think it’s broken. It really is,” he said. “I never thought that somebody could say ‘ah, gas has fallen below 100 per megawatt hours is really cheap’.”

Gas futures linked to TTF, Europe’s wholesale gas price have swung from about €70 a megawatt hour before Russia’s invasion of Ukraine to about €230 two weeks ago and then slid below €100 this week. Before May 2021, European gas prices were below €20 a megawatt hour.

As noted last week, Europe’s largest energy traders called on governments and central banks to provide emergency liquidity support to keep gas and power markets functioning as sharp price moves triggered by the Ukraine crisis have strained commodity markets. Hardy said that to move a cargo equivalent to 1 megawatt hour of liquefied natural gas priced at €97, traders must provide €80 in cash, straining their capital requirements.

Worse, confirming that Europe faces an even colder winter, Tornqvist said European utilities would struggle to fill gas storage for next winter given the “paralysed” state of the spot market for gas unless policymakers stepped in to provide guarantees to protect buyers against price swings.

But going back to diesel, Bloomberg’s Javier Blas tweeted a handful of the scariest quotes from the energy CEOs at today’s FT commodities summit:

•Trafigura CEO Jeremy Weir: “The diesel market is extremely tight. It’s going to get tighter and will probably lead into stock outs” referring to when fuel stations run dry.

•Gunvor CEO: “Europe is so short of diesel”

•Vitol CEO: “The thing that everybody’s concerned about will be diesel supplies”

Needless to say, without diesel, not only will traffic in Europe grind to a halt, but much if not all US truck based logistical support and supply chains will soon be paralyzed. The consequences for the global economy will be dire.


TOPICS: Business/Economy; Society
KEYWORDS: anwr; bidenflation; catastropnic; diesel; fearporn; gasoline; keystonexl; opec; shortage
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To: nascarnation

You-rope and the US used to swap gasoline and Diesel to level things out.


21 posted on 03/22/2022 4:44:48 PM PDT by Paladin2
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To: blam

...and ALL done by Europe, which seems to be better at punishing themselves, than punishing Putin.


22 posted on 03/22/2022 4:49:18 PM PDT by BobL (I eat at McDonald's and shop at Walmart, I just don't tell anyone.)
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To: blam

Garbage blog


23 posted on 03/22/2022 4:52:20 PM PDT by stuck_in_new_orleans ( )
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To: monkeyshine

Large cargo ships run on bunker fuel oil, not diesel. Distillate diesel is a very small fraction (about 2%) of bunker fuel oil.

Smaller vessels use marine diesel oil, and some specialty vessels like LNG carriers run off LPG/LNG.


24 posted on 03/22/2022 4:54:42 PM PDT by Skepolitic ( )
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To: blam

The main nugget:

“Europe imports about half of its diesel from Russia “

LOL


25 posted on 03/22/2022 4:54:59 PM PDT by dynachrome ("I will not be reconstructed, and I do not give a damn.")
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To: blam

Invest in gas cans........................


26 posted on 03/22/2022 5:03:27 PM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: blam

.


27 posted on 03/22/2022 5:03:30 PM PDT by sauropod (Whom the gods would destroy they first make mad.)
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To: nascarnation
Europe went real heavy into diesel cars, so their percentage of diesel vs gasoline is higher than ours.

I thought that started to change a few years back as Europe started tightening emissions on diesels (which also hurts them coming here).

Volkswagen's emissions stunt was collateral damage and also fueled the move to more gasoline vehicles in Europe, as I recall.
28 posted on 03/22/2022 5:06:17 PM PDT by Dr. Sivana (“...life is very good without Facebook and that we would live very well without Facebook."-B.LeMaire)
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To: PeterPrinciple

Have you seen the price of plastic 5 gal cans?

I paid much less 17 years ago after I bought my Diesel cars.


29 posted on 03/22/2022 5:09:05 PM PDT by Paladin2
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To: Paladin2

https://www.amazon.com/Wavian-USA-JC0020RVS-Authentic-System/dp/B01C43O95W/ref=sr_1_1?crid=VESF514SBBX6&keywords=nato%2Bgas%2Bcan&qid=1647994314&sprefix=NATO%2BGAS%2B%2Caps%2C752&sr=8-1&th=1

don’t get the plastic ones......................


30 posted on 03/22/2022 5:13:02 PM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: Paladin2
"Have you seen the price of plastic 5 gal cans?"

Yup. It's outrageous.
I buy them a garage sales for next to nothing.

31 posted on 03/22/2022 5:15:34 PM PDT by blam
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To: PeterPrinciple

And the payback period and Expected Value of buying one of those is?


32 posted on 03/22/2022 5:15:48 PM PDT by Paladin2
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To: Paladin2

And the payback period and Expected Value of buying one of those is?


you have a can to put your gas in........................

if you have any gas.


33 posted on 03/22/2022 5:19:04 PM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: blam

FYI: When I was stationed in England in the 1970s, gas on base was rationed. For my 4-clinder English Ford it was always enough. But some of the guys had American made cars with V8s and they ran out of ration stamps at the end of every period. Though against the rules, those of us who had a few coupons left at the end of the period would share and I think a blind eye was turned. Sort of in the no harm/no foul arena.


34 posted on 03/22/2022 5:20:01 PM PDT by libertylover (Our BIGGEST problem, by far, is that most of the media is hate & agenda driven, not truth driven.)
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To: blam

No diesel,

Very much less freight.


35 posted on 03/22/2022 5:27:32 PM PDT by Secret Agent Man (Gone Galt; not averse to Going Bronson.)
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To: Restless

“Part of me says this is just more fear porn.”

The world doesn’t need fear porn with Biden in the White House. He is the real deal. Our worst nightmares are about to develop in our waking hours. We haven’t seen anything yet. The ghouls running the show in the White House are plotting our complete destruction and no elected Republican speaks up. Republicans don’t even have the backbone to get rid of McConnell, just one dilapidated old burned out homosexual. The United States, as the historical entity, will not last past this year, unless Providence steps in.


36 posted on 03/22/2022 5:28:28 PM PDT by odawg
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To: blam

No problem. The unicorn delivery fleet won’t be affected.


37 posted on 03/22/2022 5:35:41 PM PDT by sphinx
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To: PeterPrinciple


38 posted on 03/22/2022 5:40:31 PM PDT by blam
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To: blam

Well, we need Electric Trucks obviously.

Diesel has an unreliable supply chain and it can spill and burn.

No way an Electric Truck could ever Set a WallyWorld warehouse on fire, and lithium fires are Easy to put out.


39 posted on 03/22/2022 5:41:08 PM PDT by algore
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To: blam

I don’t know if it would be fast but I’ll bet the saudis will be very happy to provide the other half of refined diesel to them. Refined products has been a goal of theirs for a long time.


40 posted on 03/22/2022 5:42:14 PM PDT by enduserindy (Yep. )
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