The decrease in diesel arrivals from the West due to disruptions in American production and from the East due to bottlenecks related to the Suez crisis, runs the risk of having heavy repercussions in Europe. It could face fuel shortages and a new surge in prices. Diesel futures, the global benchmark, have risen by 15% since mid-December to $845 per ton, reflecting growing concerns among investors about Europe being squeezed by supply chain disruptions in the coming months, as reported by the Financial Times.
Price increases of this fuel, used in heavy transport, agriculture, and industry, are particularly insidious because they easily transfer downstream, affecting the final price of goods and products of all kinds. The high cost of diesel is also one of the causes of protests by farmers that are spreading in many European countries. Shipments from India have been diverted to the Persian Gulf and other destinations in Asia.
Diesel supplies from Saudi Arabia to Europe have fallen to an average of 147,000 barrels per day in the period from 1-17 January, compared to 293,000 barrels per day in December. Meanwhile, volumes shipped from Kuwait have dropped to 28,000 barrels per day from 147,000 barrels per day. The greatest difficulties will be encountered in February, when Europe is expected to receive only 450,000 barrels per day of diesel until mid-month, according to estimates by Vortexa.