A global diesel shortage fueled by wars in Iran and Ukraine is unlikely to ease before next year, according to storage market indicators and industry participants, extending a spike in fuel costs that is weighing on economies worldwide.
The wars have severely disrupted diesel supplies, stranding millions of barrels a day in the Middle East and Russia, draining inventories to historic lows and sending prices to record highs. The shortage has been a drag on economic activity, as diesel fuels agriculture, manufacturing, and heavy transportation.
In the United States, retail diesel prices topped $6 a gallon this month for the first time, squeezing farmers and truckers and stoking worries for President Donald Trump's Republican Party ahead of the November midterm elections.
Another sign of persistent tightness is emerging in the storage market. Refiners and traders across North America are declining to renew diesel storage leases because there is little fuel available to store, data from storage broker The Tank Tiger showed.
Diesel storage capacity available for leasing in North America and the Caribbean Islands, a major trading hub, has climbed to a four-year high of 13 million barrels for October, from 11 million barrels in June, The Tank Tiger Chief Operating Officer Steven Barsamian told Reuters.
Total US diesel inventories declined to 107.9 million barrels by September 11, the lowest for this time of year since records began in 1982, according to the US Energy Information Administration.
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