Expert economists are warning that a critical sector of the global economy is in danger and it could have serious ramifications.
Russell Hardy, the head of one of the largest commodity trading houses and the biggest independent oil trader while speaking at the FT Commodities Global Summit cautioned of an emerging catastrophic scenario which he says will force gas stations to “run dry.”
Hardy warned that the global markets are set to face a squeeze on diesel which will result in a systemic shortage and even fuel rationing.
“The thing that everybody’s concerned about will be diesel supplies. Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East,” said Russell Hardy, chief of Switzerland-based oil trader Vitol. “That systemic shortfall of diesel is there.”
Trafigura CEO Jeremy Weir said, “The diesel market is extremely tight. It’s going to get tighter and will probably lead into stock outs” referring to when fuel stations run dry.”
Russian imports account for roughly 15% of Europes diesel consumption.
While the issue will affect Europe first and foremost, Torbjorn Tornqvist, co-founder and chair of Geneva-headquartered Gunvor Group, said, “Diesel is not just a European problem; this is a global problem. It really is.”
A Diesel shortage will wreak havoc on the American supply chain with many warning that it will force American truckers to come to a complete stop.