Global supplies of diesel fuel are tighter right now than they have been in two generations.
This by Michael Snyder on activistpost.com.
And this is catastrophic news—the entire economy of the Western world runs on diesel.
If we suddenly had no more diesel fuel, virtually all of our trains, trucks, and ships would stop running. Nearly everything that stocks our store shelves comes to us via trains, trucks, and ships.
So, the fact that there is not enough diesel fuel to go around is a really big deal. Supplies have been declining for months, and at this point diesel inventories have fallen so low that we have only a 25-day buffer remaining:
The U.S. is facing a diesel crunch just as demand is surging ahead of winter—with only 25 days of supply left, according to the Energy Information Administration.
National Economic Council Director Brian Deese told Bloomberg TV that diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices.
Unfortunately, this is not just a problem here in the United States.
Tom Kloza, dean of U.S. oil analysts at Oil Price Information Service (OPIS), told Newsweek:
The demand for diesel tends to rise as you get close to the winter, because the molecule that makes up diesel is very similar to the molecule that you use for heating homes in the U.S., for winter fuels in Europe.
The issue is global—diesel inventories around the world are the lowest as they’ve been since 1982, and we’ve added about 3.4 billion people in that time.
Read that last line again:
The total population of the planet has nearly doubled since the early 1980s, and so we truly are in unprecedented territory.
Again, global diesel supplies are the tightest they have been in two generations.
Of course, that doesn’t mean that we are about to totally run out of diesel fuel.
But as supplies get tighter, we are likely to increasingly witness temporary shortages that have the potential to cause immense supply-chain headaches:
A shortage of diesel fuel is spreading across the United States, with one company launching an emergency delivery protocol, requesting a 72-hour advance notice from clients to be able to make the delivery.
Per a Bloomberg report, fuel supplier Mansfield Energy wrote in a note to its clients that:
[C]onditions are rapidly devolving, and
At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity.
In a desperate attempt to alleviate the pressure, two tankers that were loaded with diesel and jet fuel that were headed to Europe have been turned back around.
Reuters reported earlier this month:
Meanwhile, the scarcity of diesel has prompted traders to start diverting cargoes with the fuel that were originally bound for Europe.
Tanker tracking data showed that at least two tankers with some 90,000 tons of diesel and jet fuel that were initially bound for Europe were diverted toward the U.S. East Coast.
That may help us a bit, but it is not good news at all for the Europeans.
In fact, some areas of Europe have already started to experience very serious shortages of diesel fuel.
Unfortunately, things are not likely to improve much anytime soon.
In recent years, politicians in the United States and Europe have made life really difficult for refiners.
Now we get to experience the consequences of their very foolish policies.
At this point, we are being told that the only way to reduce demand for diesel is to have a “significant slowdown in freight movements and manufacturing activity.”
Stabilizing then rebuilding inventories to more comfortable levels will require a significant slowdown in freight movements and manufacturing activity.
There are early indications manufacturing and freight activity peaked in the third quarter of 2022. If confirmed that would take some of the pressure of distillate inventories.
But a deeper and more prolonged slowdown in the United States and/or in Europe and Asia will be needed to boost inventories significantly.
Rebalancing diesel supply will likely require a further rise in interest rates and tighter financial conditions in the United States and other major economies to reduce fuel consumption to more sustainable levels.
In other words, it is going to take a recession and/or a depression in order to fix this crisis.
Ouch.
We should have never allowed things to get this bad.
Over the past decade, we should have been building a lot more refining capacity.
And [because of] the war in Ukraine, supplies from Russia that could help alleviate this nightmare are not going to be available.
So, there will be shortages and diesel prices will go a lot higher than they are right now.
Which, of course, is going to worsen our ongoing inflation crisis, because just about everything that we buy has to be transported.
Note: This is further rationale why our standard of living is going to continue to go down at a frightening pace in the months ahead.
Final thoughts: Curses be upon you damn communists. We the People have entered communist-caused societal suicide. We truly are facing hardship beyond our imaginations. And this difficult way of life is going to be with us for quite some time to come.
