Global Fuel Markets on Brink as Wars Strain Refined Product Supplies

The global fuel market is facing unprecedented pressure due to ongoing wars in the Middle East and Europe, leading to a shortage of refined products. Amrita Sen, co-founder and director of Energy Aspects, warns that 'We are in short supply globally; there is zero slack in the system.'

The US and Israel's war on Iran has led to the largest oil supply disruption in history, resulting in an outsized jump in prices for refined products. In the US, gas prices have surpassed $4 per gallon, while diesel prices are above $5. In Russia, people face long wait times for gasoline, and France has suspended weekend driving restrictions to keep fuel flowing.

The Iran conflict is expanding, with Ukraine's attacks on Russian refineries further straining global supply chains. Morgan Stanley analysts note that 'The epicenter of all this is the diesel market, and Europe in particular.' With refining capacity shrinking by almost 600,000 barrels per day since 2018, fuelmakers are running plants flat out to meet demand.