• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 31 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days If hydrogen is the answer, you're asking the wrong question
  • 17 hours How Far Have We Really Gotten With Alternative Energy
  • 11 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Breaking News:

Oil Prices Gain 2% on Tightening Supply

Gold Recycling Goes Green with Biodiesel Innovation

Gold Recycling Goes Green with Biodiesel Innovation

Chalmers University researchers introduce an…

Europe Faces Systemic Diesel Supply Crunch

Europe risks being exposed to a “systemic” deficit of diesel supply that could worsen and even lead to rationing of fuel, the top executives of the world’s largest independent oil traders said on Tuesday.

Following the sanctions against Russia over its invasion of Ukraine, as well as buyers’ “self-sanctioning,” the global markets could lose around 3 million barrels per day (bpd) of Russian crude and products supply, with European diesel supply a big concern, the executives said at the FT Commodities Global Summit today.

According to Russell Hardy, chief executive at the world’s biggest independent trader Vitol, “The thing that everybody’s concerned about will be diesel supplies.”

Particularly for Europe, the continent imports around half of its diesel supply from Russia and the other half from the Middle East, Hardy said at the FT summit.

“That systemic shortfall of diesel is there,” he added.

“This is a global problem but for Europe it’s very hard because Europe is so short” of diesel, Gunvor CEO Torbjorn Tornqvist said at the Financial Times Commodities Global Summit as carried by Bloomberg.

Europe’s diesel shortage is worsening as Russian oil refiners have started to cut back on refinery throughput, Tornqvist added.

Diesel stocks globally were already low even before the Russian invasion of Ukraine, but the shortage has now been exacerbated by the lower global diesel supply from Russia.

In the highly volatile global energy markets since Russia’s war in Ukraine began, even the biggest traders are exposed to rising margin calls. Via futures contracts in commodities, trading houses hedge against risks. Without commodity derivatives, many traders would not be able to move physical volumes of oil.  

The European Federation of Energy Traders (EFET), whose members include Trafigura, Vitol, Shell, and BP, among others, has urged European central banks for “time-limited emergency liquidity support to ensure that wholesale gas and power markets continued to function,” the Financial Times reported last week, citing a letter the federation sent earlier this month.

ADVERTISEMENT

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News