The CEOs of three of the world’s largest commodities traders, Vitol, Gunvor and Trafigura, warn that there is a threat of diesel shortage and that it could lead to rationing, writes the Financial Times. That could happen as a result of sanctions.
Russia is an important country for the supply of diesel. About half of the diesel we use in Europe comes from there, according to Hans van Cleef, energy expert at ABN Amro.
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Some companies are already no longer buying diesel from Russia on their own, according to Jilles van den Beukel, energy expert at The Hague Center for Strategic Studies (HCSS). “And that creates problems.”
In countries such as France, Belgium, Austria and the UK and is diesel is already more expensive than petrol.
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Shortage filled through Russia
In recent decades, there has already been a shortage of diesel in Europe, while there was a surplus of petrol, says Rico Luman, sector economist transport and mobility at ING.
This was compensated by imports from Russia. “Around 3 million barrels of oil per day are now imported from Russia, which we make here in refineries, including diesel and petrol.
On top of that, we get another 1.3 million barrels of oil products, including diesel, from Russia,” says Erik Klooster, director of the Dutch Petroleum Industry Association (VNPI).
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If that disappears, you can’t just get it from somewhere else, says Van Cleef. “Stocks are now low, also from a historical perspective, but there are still stocks,” says Klooster. “But the stocks are not so well stocked that you can draw on them in the short term,” thinks Van Cleef.
Are there alternatives?
“If imports from Russia disappear, the question is how quickly we can compensate for this with imports from other parts of the world,” says Klooster. Oil from the Middle East can meet some of the demand, he thinks. That will be at a higher price. But some refineries in Germany and countries in Eastern Europe now get crude oil piped directly from Russia.
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Germany is dependent for about 25 percent of its domestic demand on crude oil that comes through such a pipeline. You cannot just supply these refineries from the port of Rotterdam or Antwerp, the physical infrastructure is insufficient for this, according to Klooster. And you can’t very quickly adapt refineries to other types of oil, Luman says.
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The number of countries that can pump up more oil to absorb the possible loss of Russia is also limited, Klooster fears. Not all oil can be used to make diesel, by the way. For diesel you need heavier oil, which hardly comes from the US.
Depends on developments in Ukraine
Whether there will really be a shortage of oil depends on how the situation around Ukraine develops, says Van den Beukel. One majority in the House of Representatives wants even tougher sanctions against Russia for its invasion of Ukraine. For example, Europe must stop buying Russian oil.
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In addition, Russian ships should be banned from European ports. But the German Prime Minister Olaf Scholz sees nothing in that.
An oil boycott is in any case more obvious than a boycott of Russian gas, Luman thinks. This is partly because oil is available worldwide and a boycott of Russia is therefore less difficult to absorb.
After all, you can simply throw oil or oil products into a ship and unload in Europe. For liquefied gas you need special facilities to bring that gas ashore and make it gaseous again.
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Transport sector
If there really is a shortage of diesel, the transport sector will especially suffer if the price rises, Luman thinks. According to him, transport accounts for the vast majority of the diesel we use. Consumers consume relatively little diesel. ING expects that only 10.8 percent of passenger cars in our country will run on diesel this year.
Truck drivers can drive more economically, by driving less fast and braking more wisely, says Luman. “There are big differences between the best and the worst performing drivers, tens of percent difference,” he says. “You can also look at tire pressure and the air resistance of trucks, among other things, there is little attention to that at the moment.” But that won’t completely solve the problem.
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