Northwest Europe is expected to start the winter with record low levels of diesel, which fuels large sections of the economy. European customers may face energy rationing this winter as prices continue to rise amid fears that Russia could cut off gas supplies.
According to Wood Mackenzie, the continent’s stocks of road diesel, heating oil, and other diesel-type fuel are likely to shrivel this November to the lowest level since records began, dating back to the beginning of 2011.
Russia is Europe’s largest supplier of diesel and associated fuels, exporting more than three-quarters of a million barrels per day for use in heavy machinery, transportation, farming, fishing, and power and heating in Europe.
According to data from Insights Global, supplies of fuel in independent storage facilities in the Amsterdam-Rotterdam-Antwerp oil trade region are at their lowest level since 2008.
The rise in diesel prices in Europe impacts the industry by rising fuel and transportation prices, passing on costs to consumers through high costs across the economy.
John Cooper, director general of Fuels Europe, which is a division of the European Petroleum Refiners Association, said that there is a clear link between diesel and GDP as “everything that goes into and out of a factory” requires diesel.
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The ban on imports from Russia could become more of a problem early next year for the shortage of natural resources. Europe is short of diesel-type fuel, while Russia has been Europe’s biggest external supplier.
Even now, when Europe’s stockpiles normally increase, there are signals of supply restrictions. OMV Germany, an oil refiner, reported increased demand for heating oil and diesel.