"Trouble ahead as traders warn of global diesel shortage"

" \n Trouble ahead as traders warn of global diesel shortage \n \n\n \n The world\u2019s leading commodities traders have warned that sanctions on Russia are putting a squeeze on diesel markets, with Europe being the most at risk of a systemic shortage that might lead to fuel rationing. \n \n\n \n According to the CEOs of three of the world\u2019s top commodities dealers; Vitol, Gunvor and Trafigura, this is the case. This was stated by the company leaders during the\u00a0 FT \u00a0Commodities Global Summit in Lausanne, Switzerland. \n \n\n \n The commodities dealers explained that sanctions against Russia might result in the loss of up to 3 million barrels of oil and its products every day as a result of the country\u2019s invasion of Ukraine. \n \n\n \n What you should know \n \n\n \n European energy prices surged after President Vladimir Putin said Russia will demand payments in rubles from natural gas buyers. \n \n\n \n The price of benchmark gas futures increased by more than 30%, followed by the price of power and coal. Putin instructed the Russian central bank to devise a method for making ruble payments for gas within a week. \n \n\n \n Italy, which is one of Russia\u2019s biggest gas buyers, has already announced that it will not pay in rubles. At the\u00a0 Bloomberg \u00a0Capital Market Forum in Milan, Prime Minister Mario Draghi\u2019s economic adviser, Francesco Giavazzi said that paying in rubles could be a way to circumvent sanctions. OMV AG, based in Austria, stated that payments in rubles are not included in its gas contracts with Russia. \n \n\n \n Read: Pressure on cedi\u00a0continues as $75m BoG forex auction oversubscribed 3.6 times \n \n\n \n The European Union and the United States are working on an agreement that would guarantee EU member states access to American liquefied natural gas and hydrogen as the union seeks to reduce its reliance on Russian energy. \n \n\n \n Nairametrics \u00a0reported that Dmitry Pesko, the Russian President\u2019s press secretary, stated that a European Union ban on Russian oil would have a big influence on the global petroleum market, notably in Europe. \n \n\n \n Consequently, the continent remains tense, with fears of an energy shortage growing. Supplies of everything from diesel to coal are still scarce. The energy crisis, as well as the race to replace Russian raw resources as a result of the country\u2019s war in Ukraine, has driven up fuel costs. \n \n\n \n What traders are saying \n \n\n \n Russell Hardy, chief of Switzerland-based oil trader, Vitol, stated that Europe is largely dependent on Russia for diesel.\u00a0 \u201cEurope imports about half of its diesel from Russia and about half of its diesel from the Middle East,\u201d\u00a0 he said.\u00a0\u201c That systemic shortfall of diesel is there.\u201d \n \n\n \n According to Hardy, Europe\u2019s transition to higher diesel consumption over petrol has resulted in gasoline shortages. He went on to say that refineries could increase diesel output at the expense of other oil-derived products in response to higher prices, but that rationing was a possibility. \n \n\n \n Torbjorn Tornqvist, co-founder and chair of Geneva-headquartered Gunvor Group, said,\u00a0 \u201c Diesel is not just a European problem, this is a global problem. It really is.\u201d \n \n\n \n Amrita Sen, the chief oil analyst at Energy Aspects, said, \u201cdiesel is by far the worst affected\u201d of the oil products because Europe imports close to 1mn barrels a day of Russian diesel and the world entered the conflict with near-record low stocks of oil. \n \n\n \n According to Jeremy Weir, CEO of Singapore-based Trafigura, 2 million to 2.5 million barrels of Russian oil production, split between crude and processed products, will disappear from the global market. He said,\u00a0 \u201c The diesel market is extremely tight. It\u2019s going to get tighter.\u201d \n "

"Trouble ahead as traders warn of global diesel shortage"

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