The World’s Diesel Problem Runs Deeper Than the Iran War
Oil and Gas Production Climbs Despite Extreme Oil Price Volatility Gail Tverberg is a writer and speaker about energy issues.
She is especially known for her work with financial issues associated with peak oil.
Prior… The nature of the shortage of diesel and jet fuel is more complex than most people realize.
Based on my analysis, a shortfall has existed since at least 2020.
The shortage is not simply the result of the closure of the Strait of Hormuz.
In this post, I will provide background information regarding the nature of the shortfall and the international conflict it is leading to.
I will also share my thoughts on how, over the long term, the situation might be mitigated.
I doubt whether a solution will be available in the short term, but I can at least give readers an idea of one direction in which a possible workaround might be available.
My idea is that the economy needs to transform itself in a way that uses diesel and jet fuel (grouped together on some reports as “middle distillates”) more sparingly.
At the same time, research on extracting heavy oil and bitumen at lower cost is needed.
If this is done, it may be possible to use additional heavy oil to increase the supply of diesel and jet fuel.
One thing that will probably need to change is the price of diesel relative to gasoline.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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