Diesel Crisis Threatens to Outlast the Middle East War
The outlook for the Middle East war remains grim, the U.S. just threatened Iran with the “toughest sanctions in history,” and the world is running out of stored fuels.
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Key Facts
- Fact 1: Both Brent crude and West Texas Intermediate are below $100 per barrel, even if they are both up by around $20 per barrel from pre-war levels.
- Fact 2: Diesel in Europe, for instance, is up by 70% from pre-war levels, as reported by Reuters’ Ron Bousso this week.
- Fact 3: The premium over crude prices jumped to as high as $102 per barrel on Monday, before easing slightly to about $100 a barrel on Tuesday.
- Fact 4: In fact, per the International Energy Agency, as much as a fifth of that refining capacity, totaling some 9.6 million barrels daily, has been knocked out by hostilities.
The outlook for the Middle East war remains grim, the U.S. just threatened Iran with the “toughest sanctions in history,” and the world is running out of stored fuels.
To make matters worse, refining capacity is down considerably, and even if the outlook for the war suddenly changed and the U.S. and Iran made peace, the fuel squeeze will last for months—and so will its adverse effects on the global economy. Watching crude oil prices, one would think everything is under control.
(Original synthesis pending human/AI review — generated by the stub provider by selecting real sentences from the source material, not by writing new analysis or commentary.)
Original source: OilPrice.com
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