Sanctions on Russia have distorted global energy markets and refinery runs. From Rystad Energy at oilprice.com:
- Diesel and gasoline markets are witnessing crack spreads in the $50-$60 per barrel range due to inventory stocks across the world being at record lows.
- The global oil demand recovery looks resilient as the final Covid-related restrictions are being removed around the world.
- Refining capacity in both Europe and the U.S. has fallen dramatically in the last decade, making the replacement of low inventories particularly difficult.
Global diesel and gasoline markets are witnessing blowout crack spreads in the US$50-60 per barrel (bbl) range, reflecting a clear lag in the refining system to respond effectively and decide between supplying diesel or gasoline. The precarious situation is driven by inventory stocks across the globe being at their lowest levels historically and, therefore, unable to provide the necessary shock absorbers. The loss of Russian refining owing to operational outages and product containment challenges has caused a diesel/gasoline hole greater than 1 million barrels per day (bpd) in Europe that is not easy to plug, Rystad Energy research shows.
“Diesel is the lifeblood of the global economy, essential to vital sectors such as agriculture, construction, and transportation – its price impacts almost all supply chains and goods. Governments face tough decisions. They can assist consumers by dropping taxes on diesel, but this will likely only increase demand, which may support the overall economy but will worsen the existing tight supply situation. If supply does not improve, governments will be forced to enact emergency plans to limit sales to consumers in order to ensure essential sectors are kept going,” says Per Magnus Nysveen, Head of Analysis at Rystad Energy.
Ethanol added to gasoline makes no sense, whether you’re talking economic sense or energy sense. From Jon N. Hall at americanthinker.com:
In July of 2021, this writer took a little trip through rural Missouri. Besides visiting kinfolk whom I hadn’t seen for far too long, one purpose of my trip was simply to do something else, something different. You see, I’d become something of a recluse and I really needed to just go outside, blow the stink off, maybe even commune with Nature, whatever that is.
My destination was a spot near the center of the northeast quadrant of the state, about a three-hour trip by car. The most expeditious route from Kansas City would be to take I-70 to Columbia and then motor north on US 63 for about an hour. Not really interested in expedience, I chose the scenic route, “a road less traveled,” US 24 to be exact.
Driving eastward on 24, what impressed me was the modern world’s utter dependence on petroleum. Not only was I leisurely tooling along in my 1990 Taurus, which happens to burn gasoline, but everything I surveyed depended on oil. The lawns and pastures of the rural folk were nicely manicured. All that mowing takes a lot of oil, but that’s nothing when compared to the crops, especially the corn.
The corn crop did not look like any corn that this kid could remember. It was lush and tightly packed, dense even. Every field looked like it had been planted and cultivated by the same farmer, maybe some corporation. I’d bet a buck that this corn I drove past was genetically-modified Frankencorn, and totally dependent on high-powered fertilizers. I’ve probably eaten tons of it in the cheap salty corn chips I’m addicted to.
From The Babylon Bee:
WASHINGTON, D.C.—In spite of Democrats’ best efforts to curb the use of fossil fuels, stubborn Americans continue to use them to power their automobiles and heat their homes. Biden is responding to this crisis with an ambitious new plan to raise the price of gas to $100 per gallon by the end of his first 100 days in office.
“Listen– all these fossil fuels, they gotta stop! Gotta stop!” Biden said to the Secret Service agent pumping gas into his presidential limo. “We gotta do something about these selfish Americans and one-horse kangaroo herders burning all these fuels without consequences. I know consequences. Just ask Corn Pop and his buddies. When I’m done with ’em, these Americans will never burn a gallon of gas again, Jack!”
The administration has announced the “Gas Prices To The Mooooon” campaign– a series of executive orders designed to drive the price of fuel up to make it unattainable to anyone except John Kerry.
When confronted with the question of how Americans will afford to get around with $100-per-gallon gas, House Speaker Nancy Pelosi suggested they stay home and eat some ice cream instead.
Currently, the average price stands at $2.53 per gallon and rising, which experts say is likely Trump’s fault.