You may be wondering what the cause of the diesel engine oil shortage is.
This issue has been affecting numerous areas in the United States. And in fact, a company launched an emergency delivery protocol. This resulted in a requirement of a 72-hour advance notification from clients to make the delivery.
Now, you are probably wondering why this is happening at all. Or whether the issue will continue to happen and worsen.
Keep reading to understand the reason behind this oil shortage and whether you should be concerned or not.
Why is there a diesel engine oil shortage?
So the big question here is this – why is there a diesel engine oil shortage?
And for those who may not be up-to-date with what is happening to the engine oil crisis, they may also be wondering – is there a diesel engine oil shortage at all?
In the United States, the Mansfield Energy is a fuel supplier that notified its clients about the rapidly devolving conditions linked with diesel engine oil shortage. Carriers are also required to visit several terminals just to locate supplies. Hence, this results in a delay with the deliveries while straining the local trucking industry’s capacity.
Furthermore, there has been a decline in diesel fuel stocks in the United States. This has been happening for quite some months now, with the level of supply being lower than what it was in 2008. In fact, the country only reports having about 25 days of their diesel supply in stock.
Additionally, the Colonial Pipeline is fully booked to transport diesel fuel to the East Coast. This should ease the pressure regarding fuel supply. Yet, it is likely to take a while since the initial deliveries are bound to begin by November.
It is also worth noting that this diesel shortage issue is experienced not just in the United States but also in Europe. The fuel prices have increased significantly because of this shortage.
Underinvestment in the refining capacity, as well as refinery closures have occurred in the United States. These have all been linked with the scarcity of the refined oil products, and most specifically diesel.
Because of such refining constraints, there is a sharp wedge present between crude and product markets. Thus, the policy management linked with crude supply is not quite effective when it comes to controlling the prices of fuel.
Yet at the same time, the diesel scarcity prompted many traders to begin diverting their cargoes with fuel bound originally for Europe. The tanker tracking data also presented that about two tankers carrying about 90,000 tons of diesel, as well as jet fuel, were originally headed to Europe but diverted to the East Coast of the United States.
With the United States only having about 25 days supply of diesel in the reserves, this led to a sharp increase in price at present – something that is likely to persist in the next 6 months if not addressed sooner.
Now, there are some assumptions that one of the most potent ways to deal with this issue is by slowing down the fuel consumption. But as of this time of writing, there is no definitive solution to this matter yet.
The stocks are only at 106 million barrels, as reported by the Energy Information Administration. This is also the lowest number of barrels for this year ever since the EIA began maintaining their database.
Moreover, it is 26 million short as compared to the normal average of supplies for this year. But to make matters worse, it is not just something that plagues the United States but also other parts of the world.
As for the reasons why this diesel shortage is even happening, it is primarily due to the war between Russia and Ukraine. There is a ban on the import of diesel coming from Russia, which is why there is a limit in the supply because the Western market is now low on diesel. The problem is even worse now that winter is approaching and the frigid months are coming up.
In Western Europe and in the United States, people use diesel for heating their homes. Thus, with the shortage in fuel supply, this makes it a problem for those who need diesel for keeping their homes warm during this time of the year.
The diesel engine oil shortage has also been linked with the prices going up by 50 percent. This is in comparison to the prices from the year before.
The issue with diesel engine oil shortage is something that has been hanging around us for the past few months. However, it has become worse because of the cooler months approaching, where many homes in the United States and Western Europe are relying on diesel to warm their homes.
Unfortunately, the shortage in fuel makes things worse because of the limited supply for consumers. The prices have also gone up significantly as a way to curb the supply deficit.
Until then, the world waits on what the solution is for this shortage in diesel engine oil. With import on fuel being banned by Russia, further actions and solutions should be explored to discover other ways to obtain diesel without depending solely on just one source.