WSJ told about the supply through the Strait of Hormuz “wrong” fuel
Crude oil passes through the Strait of Hormuz again, but the world needs diesel fuel. The Trump administration is exploring all possible options to curb rising diesel prices affecting the cost of other goods
Ships ship almost as much crude oil out of the Strait of Hormuz as they did before the Iran war, but that doesn't affect the fuel the world needs most: diesel. According to The Wall Street Journal (WSJ).
The lack of diesel fuel is of paramount importance in American politics. The administration of US President Donald Trump is exploring all possible options to stop the soaring price of diesel fuel, which is affecting the cost of products, gadgets and other goods transported by trucks.
At the end of September, the average price of a gallon (3.785 liters) of diesel, as the newspaper notes, reached a record $6.53. In California, the cost of diesel reached an all-time high of $8.44 per gallon.
“Consumers do not buy crude oil. They buy gasoline, aviation fuel and diesel. Missile and drone strikes in the Middle East have damaged several major refineries. The world has found itself experiencing a shortage of petroleum products, said Andy Lipow, president of Lipow Oil Associates.
The WSJ says the recovery of oil supplies will not solve the problem anytime soon. According to Kpler, on Saturday, October 3, the average amount of crude oil transported through the Strait of Hormuz reached 10.3 million barrels per day, or 76% of the pre-war base level. At the same time, deliveries of petroleum products such as gasoline and diesel amounted to only 1.3 million barrels per day, which is only 11% of the total flow. Before the war, their share was more than 20%.
On October 1, the US president said he was considering banning diesel exports. He said he was discussing the measure with Energy Secretary Chris Wright and Home Secretary Douglas Bergham, but warned that restricting exports could lead to higher prices for other goods.
Washington also demanded that European countries use fuel reserves, allowing the supply of American diesel to be limited. The EU has "strongly rejected" the possibility. European Commission spokeswoman Anna-Kaisa Itkonen said the ban would not benefit either side and would undermine confidence in the United States as a reliable partner.
Later, the G7 countries agreed to release up to 100 million barrels of diesel and oil from strategic reserves within four months under the coordination of the International Energy Agency (IEA).
After that, Trump said that he would not impose a ban on diesel exports. “Europe has a large amount of diesel fuel and will make a big contribution to the global market, just like us.” We will not impose an export ban, he said.
