European economies are at risk of running out of diesel, the preferred fuel for heavy industry, as Russian energy sanctions threaten to interrupt imports while other sources of supply remain scarce.
Russia is Europe's largest supplier of diesel and associated fuels, sending about a quarter-million barrels per day for use in heavy machinery, transport, farming, fishing, and electricity and heating in Europe. The increase in diesel prices in Europe has already had an impact on business, raising fuel and transportation expenses, which are then passed on to consumers via increased prices across the economy.
"Governments have a very clear awareness that there is a definite link between diesel and GDP," says John Cooper, director general of Fuels Europe, a part of the European Petroleum Refiners Association. In response to Russia's invasion of Ukraine, the United States has banned Russian oil imports, the United Kingdom has indicated it will phase out Russian oil and oil products imports by the end of 2022, and the European Union is considering a ban.
Meanwhile, numerous oil corporations have backed away from buying Russian crude due to concerns about public opposition, difficulties obtaining financing and insurance, and ship owners' unwillingness to load from Russian ports. According to energy consultancy FGE, around 760,000 barrels per day of Russian gasoil and diesel flows to Europe would be at risk, requiring replacement, if European consumers ignore these volumes.
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