The head of Vitol, the world‘s largest independent oil trader, has warned of a “systemic” shortage of diesel in Europe resulting from a potential disruption in Russian supplies, which could lead to fuel rationing.
Meanwhile, the head of one of the biggest commodities trading houses said shortages were a global problem.
Torbjorn Tornqvist, co-founder and chairman of the Geneva-based Gunvor Group, echoed the concerns of Russell Hardy, chief executive of Vitol, with estimates of up to 3 million barrels a day being lost to Russia. following the sanctions.
Business leaders were speaking at the FT Commodities Global Summit on Tuesday.
Vitol’s Hardy said the switch to greater diesel consumption over petrol on the continent had helped create fuel shortages.
“The thing on everyone’s mind will be the supply of diesel. Europe imports around half of its diesel from Russia and around half of its diesel from the Middle East,” said the Swiss-based Vitol boss. “This systemic shortage of diesel is there.”
Törnqvist added: “Diesel is not just a European problem, it is a global problem. It really is.”
Hardy said refineries could increase diesel production in response to higher prices at the expense of other petroleum-derived products to bolster supply, but acknowledged rationing was a possibility.
As diesel shipments continue to roll out of Russia, ship brokers have predicted supplies from refineries in the Middle East, India and the U.S. Gulf will rush in to fill the void left by lower exports. of Russian diesel to Europe. Even East Asian refineries are considering exporting to Europe to take advantage of soaring diesel prices.
The UK, which depends on Russia for 18% of its diesel consumption compared to 8% of the country’s total crude oil demand, has pledged to phase out Russian oil and its products by the end of the year.
Pump prices for diesel in Britain jumped 40% year on year to their highest level on record at 176.76p per litre, according to car services group RAC.