The fuel that 'turns the wheels' of the world economy is alarming. The global market for diesel, which provides energy for heavy loads from trucks to tractors, from construction equipment to ships, is experiencing the harshest supply squeeze in recent years. The problem is not just that oil is getting more expensive. The fact that refineries in the Middle East and Russia are largely out of action has also reduced the capacity to convert crude oil into usable fuel. According to the Wall Street Journal, before the Iran war, the Middle East accounted for 19 percent of global diesel exports and Russia for 11 percent. Shipments from Gulf countries fell to a quarter of pre-war levels in August, while Russian diesel exports fell to about 20 percent of May levels. US refineries have covered some of the deficit, but they are also nearing full capacity.
The price shock was reflected in records. While retail diesel in the USA reached a historical peak of $6.53 per gallon (3.79 liters), the average price in the EU increased to $9.63 per gallon ($2.54 per liter), according to Eurostat data. IEA President Fatih Birol, in his assessment reflected on Anadolu Agency, stated that diesel prices have approximately doubled compared to the pre-war period and said, "Diesel prices will put upward pressure on inflation figures all over the world in a very short time."
1 day's worth
G7 leaders took action on this. It was decided to release a total of 100 million barrels of crude oil and diesel from strategic reserves to the market within four months. Due to the fact that a significant amount of diesel will be released into the market in the first 20 days, Brent oil decreased by 2.2 percent to 100 dollars.
However, according to the New York Times, 100 million barrels correspond to the world's oil demand of only about one day. Speaking to Euronews, Wood Mackenzie's Alan Gelder emphasizes that a large diesel release could result in a drop of 0.10 to 0.15 euros per liter at the pump, but this would only buy time as global supply lags behind demand.
They wash in the rain and sleep on the ramp
The most vivid image of the diesel crisis is experienced on US highways. According to the Wall Street Journal, citing a trucking facility in Texas, drivers now count every dollar, not just the route. Currently, a trucker's filling of 572 liters costs $944. The same fuel was about $500 a year ago. Independent drivers cook their meals in the cabin to cut costs, and sleep on the ramps where they unload cargo to avoid paying parking fees. Those who do not want to pay $100 to have their trucks washed wait for the rain to clean their vehicles. Some people try not to start the engine unnecessarily even for a minute. More than a dozen small trucking companies have filed for bankruptcy in the past month.
The 'last bullet' analogy
Europe is one of the most fragile regions of the crisis. The move away from Russian fuel and the decrease in refinery capacity in recent years due to high costs and climate regulations have made the continent more dependent on imports. Europe imports about 1.5 million barrels of diesel a day, with about a third of that coming from the United States. Since refineries on the continent operate at over 80 percent capacity, there is limited space to significantly increase production in a short time.
The EU had an emergency diesel stock of 36 million tonnes at the end of June. This amount corresponds to approximately two months of consumption. Energy Aspects analysts quoted by the Financial Times describe strategic reserves as "the last bullet in the barrel." Because opening stocks may relieve price pressure today, but if the crisis drags on, the safety buffer that Europe has will shrink.
What is needed for lasting relief?
Crude oil is converted into gasoline, diesel, jet fuel and other products in the same process. In the USA, approximately 42-49 liters of diesel and 72-76 liters of gasoline are obtained from a 159 liter barrel. The most important additional source in the short term is China. According to Kpler data, Chinese refineries supplied approximately 800 thousand tons of additional product per month to the global market in August and September. However, the deficit originating from the Middle East was approximately 4 million tons in September. According to experts, for permanent relief, Middle Eastern exports must recover, refinery losses in Russia must decrease, or other producers must step in permanently.
It reached 3 households in Turkey
A liter of diesel in Istanbul was 60.30 lira before the war. While the price exceeded 100 liras for the first time with 100.31 liras on September 17, it decreased to 97.10 liras on October 1. The nominal increase compared to the pre-war period was 61 percent. In Europe, the increase in the EU weighted average in the same period was approximately 40 percent.
