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Diesel Supply Shortage Could Cripple Nation’s Economy



By Nancy Thorner – 

As reported on October 24, 2022, US Has ONLY 25 DAYS OF DIESEL SUPPLY; Shortage Could Cripple Economy.

And why is this such an important story? 

“Diesel fuel shortages will disrupt the entire US transportation supply chain.  Not only do the trucks run on diesel but so do trains. Airports get their jet fuel by trucks. Think about that. That means gasoline, food, Thanksgiving and Christmas supplies all will get disrupted. Delivery of home fuel oil supplies by truck will be impacted. Think supply chain shortages were bad before, you ain’t see nuthin yet. And it will hit after the election.”

Even a top White House official has declared the stockpile levels to be “unacceptably low.”

National Economic Council Director Brian Deese, a top adviser to President Joe Biden, told Bloomberg News last week that current diesel levels are “unacceptably” low and that “all options are on the table” to increase supplies.”

The diesel crunch comes just over two weeks before the November 2022 midterm elections and will likely drive up prices even more. Diesel is the fuel used by freight trains and commonly used by long-haul truckers to transport goods and food.

As a transportation fuel, diesel fuel offers a wide range of performance, efficiency, and safety features. Diesel fuel also has a greater energy density than other liquid fuels, so it provides more useful energy per unit of volume.” 

According to AAA data. The average price for a gallon of diesel stands at around $5.33 nationwide, or up nearly $2 since the same time in 2021.  Wholesale diesel prices at the New York spot market spiked last week to more than $200 per barrel.

All this is happening in the aftermath of Biden’s recent announcement that it would release another 15 million barrels of oil from the U.S. Strategic Petroleum Reserve, part of the 180 million Biden authorized in March.

Republicans are correct in saying that the further release is just a bid to keep Democrats politically afloat ahead of the midterms, despite Biden and his allies claiming it’s not a political tactic.

As Biden indicated on October 19:

“The United States government is going to purchase oil to refill the Strategic Petroleum Reserve when prices fall to $70 a barrel.  “And that means oil companies can invest to ramp up production now, with confidence they’ll be able to sell their oil to us at that price in the future: $70.” 

This move comes after the International Organization of the Petroleum Exporting Countries Plus (OPEC+) announced that it would cut oil production.

What John Barrasso (R-Wyo.) told the New York Post last week:

“Now, after draining our emergency reserves to a 40-year low, Democrats want billions more of taxpayer dollars to refill the [Strategic Petroleum Reserve] at more than double the price.  This is a direct attack on every single American struggling to fill their tanks and heat their homes.”

October 27, 2022 update

In an updated article dated October 27, 2022 by Jack Phillips of the Epoch TimesDiesel Shortage Spreads Across East Coast as Goldman Sachs Issues Warning  

One company has launched an emergency delivery rule.  “Mansfield Energy is now requiring a 72-hour notice for deliveries to obtain freight and fuel “because conditions are rapidly devolving,” the firm told customers, according to Bloomberg News. Fuel prices are running 30 cents to 80 cents higher than the market average, according to the firm.”

As Goldman Sachs warned on Oct. 25, because of dwindling diesel supplies, a shortage of diesel fuel will likely push prices even higher because long-haul trucks and freight trains run on diesel, which translates to higher prices on goods and food nationwide.

Consider this note released by Goldman Sachs:  “Underinvestment in refining capacity coupled with refinery closures and operation disruptions have contributed to the diesel scarcity”

What Tom Kloza, Opis global head of energy analysis, told USA Today on Oct. 26:  “The public are apoplectic when gas rises, but diesel has incredible impacts to inflation in the form of freight costs and surcharges.”

“Between now and the end of November, if we don’t build inventories, the wolf will be at the door,” Kloza said. “And it will look like a big ugly wolf if it’s a cold winter.”

According to Goldman Sachs:  The federal government’s efforts to curb higher energy prices will likely fail because it focuses on crude oil and has little impact on refined fuels.

In that diesel is similar to heating oil that’s used for furnaces across the United States, when the winter months approach, demand for heating oil will rise, which will likely place more constraints on diesel.

Final thought

Things are bound to get a lot worse before they get better. Electing a Republican House and Senate in November will get the ball moving in the right direction to place this nation once again on the road to energy independence.


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