Russia drops diesel fuel production. Dry Europe?

Europe's diesel shortage is worsening as Russian oil refineries have begun to reduce refinery production, according to the CEO of one of the world's largest independent commodity trading companies, Gunvor. "This is a global problem, but for Europe it is very difficult because Europe is already scarce in the supply of diesel," Torbjorn Tornqvist, CEO of Gunvor, told the Financial Times Commodities Global Summit hosted by Bloomberg .

Trade in Russian diesel is becoming scarcer due to European buyers shying away from Russian production, awaiting further sanctions against Russia for the invasion of Ukraine, or simply refusing to buy Russian energy to finance the Putin's war in Ukraine. According to Gunvor's Tornqvist, buyer "self-sanctions" have already begun to force Russian refineries to cut production. "What does it mean? It means that more crude oil will need to be exported instead of commodities, and we believe that this is not possible and will lead to cuts in Russian production, ”he said, as reported by Bloomberg.

Global diesel stocks were already low even before the Russian invasion of Ukraine. According to estimates by Reuters' John Kemp, diesel fuel inventories in Europe are at their lowest since 2008 and 8%, or 35 million barrels, is below the five-year average for this time of year. In the United States, the situation is even more serious. There, diesel fuel stocks are 21% lower than the pre-pandemic five-year seasonal average, which translates to 30 million barrels. In Singapore, a global energy trading hub, diesel fuel stocks are 4 million barrels below the seasonal average of five years before the pandemic. In addition to exacerbating the global diesel supply crisis, sanctions against Russia are likely to force Russian companies to shut down crude oil production, analysts say. So we are faced with the absurd: Russia will have to close its refineries because it is unable to sell its distillate products, and is also struggling to export crude oil, meanwhile Europe risks stopping due to a shortage of diesel fuel !! Tafazzi, in front of our politicians, is an example of lucidity-

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The article Russia drops diesel fuel production. Dry Europe? comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-russia-cala-la-produzione-di-carburante-diesel-europa-a-secco/ on Wed, 23 Mar 2022 13:00:53 +0000.