the weight of the sanctions against Russia- Corriere.it

Diesel could be rationed in Europe due to a “systemic” shortage. The alarm comes from leading manufacturers and traders gathered at the FT Commodities Global Summit in Lausanne, Switzerland. Managers and experts have talked about a possible rationing of diesel fuel due to sanctions on Russia after the invasion of Ukraine. Sanctions that mean millions of barrels of imported oil less for the sector. In fact, a black hole in the supply of crude oil from which gas oil (also called diesel) is obtained by fractional distillation.

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There is no oil

As reported by the London financial newspaper Financial TimesRussell Hardy, head of Vitol, a Swiss oil trader, gave the alarm: The thing that worries everyone is the diesel supply. Europe imports about half of its diesel from Russia and the rest from the Middle East. Many European refineries also imported semi-finished products to produce diesel from Russia, such as vacuum-packed diesel oil (Vgo). If it is true that the European Commission, at the moment, has not placed an embargo on Russian fuels, it must be said that the import of oil and derivatives from Moscow has decreased. Among the European groups that have cut their purchases in Russia are Eni, Shell, BP, Total Energies, Repsol and Galp, just to name a few. Consequently stocks of oil and diesel have plummeted everywhere and in Europe they are at seasonal lows for 15 years now. In this scenario, European oil refiners will likely be forced to cut diesel production as they scramble to find alternatives to Russian black gold. To understand the damage to the sector it is enough to know that Italy alone mattered 2.5 million barrels of crude oil per day from Russia.

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High demand and little raw material: rationing

According to Hardy this crisis is also affected by the transition to a greater consumption of diesel than petrol in Europe, which has contributed to the current fuel shortage. In these cases the risk is also an increase in prices. Indeed, some refineries could concentrate their production on diesel to the detriment of other petroleum products that are currently less profitable. For analysts and managers, starting from April some diesel exporting countries could then ration sales. Which would open up to a scenario of competition between countries in the last barrel.

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