Energy corporations warn the world will be short of diesel oil

Energy groups such as Vitol, Gunvor and Trafigura estimate they will be short of about 3 million bpd of oil from Russia due to economic sanctions from the US and the West.

“Europe imports about half of its diesel from Russia and the other half from the Middle East“, Vitol CEO Russell Hardy said the loss of supply from Russia will cause a serious shortage of diesel.

“Diesel isn’t just a European problem, it’s a global problem”, said Mr. Torbjorn Tornqvist, co-founder of Gunvor.

Amrita Sen, research director and oil analyst at Energy Aspects, said the diesel market was hit the hardest among oil products. The reason is because Europe imports nearly 1 million bpd from Russia while the world’s oil reserves are currently near record lows.

According to Jeremy Weir, CEO of Trafigura, the global market will lose about 2-2.5 million barrels of oil from Russia, including crude and refined products.

“The diesel market is inherently scarce. It will become even more scarce,” said Mr Weir.

Last week, many of Europe’s top energy traders called on governments and central banks for emergency liquidity support to keep gas and electricity markets alive as the Ukraine crisis sent prices volatile. strong.

In another development, French oil and gas group TotalEnergies announced that it would stop contracts to buy diesel oil from Russia “as soon as possible” and at the latest by the end of 2022. This decision can only be changed if there are only marketing from European governments.

Currently, the countries of the European Union (EU) have yet to agree on the issue of Russia’s oil embargo. Some of the countries supporting the ban have shown impatience with the pace of negotiations.

“Why is Europe giving Russia more time to profit from oil and gas? Time to punish Russia“, Lithuanian Foreign Minister Gabrielius Landsbergis posted on Twitter.

The Baltic states share the same view as Lithuania. However, Germany, the Netherlands and Italy objected because energy prices were too high. According to Germany and the Netherlands, it is not possible to issue a ban because the EU is still dependent on Russian oil and gas. Specifically, 27% of oil and 40% of gas consumed in Europe are imported from Russia, of which Germany imports 55% of natural gas, 52% of coal and 34% of oil from Russia.