Bloomberg: Europe faces winter diesel crunch as conflicts disrupt supplies

Europe could face a diesel shortage and sharply higher prices this winter as conflicts in the Middle East and Ukraine disrupt supplies ahead of seasonal demand, according to industry experts cited by Bloomberg.

Disruptions in the Strait of Hormuz, damage to refineries in the Persian Gulf and Ukrainian attacks on Russian oil facilities have significantly reduced exports from regions that together accounted for about one-third of global diesel exports last year.

Europe is particularly exposed because of its limited refining capacity and heavy reliance on imported diesel. Continued geopolitical tensions in the Middle East could further tighten supplies.

“Europe has major problems with diesel fuel. The situation will worsen: we are likely to see extremely high fixed prices,” said Eugene Lindell, head of the petroleum products division at consulting firm FGE NexantECA.

Lindell warned that higher diesel prices could increase transportation costs and add to inflationary pressures across European economies.

Bloomberg also noted that if geopolitical tensions persist, refineries in Asia and the United States could reduce diesel exports as winter approaches in order to meet domestic demand, putting additional pressure on global supplies.

By Sabina Mammadli