The head of Vitol, the world’s largest independent oil trader, has warned of a “systemic” shortage of diesel in Europe stemming from potential disruption to Russian supplies, which could lead to fuel rationing.
Meanwhile, the head of one of the largest commodity trading houses said the shortages were a global problem.
Torbjorn Tornqvist, co-founder and chair of Geneva-headquartered Gunvor Group, echoed the concerns of Russell Hardy, Vitol’s chief executive, with estimates of as much as 3mn barrels a day lost from Russia as a result of sanctions.
The corporate leaders were speaking at the FT Commodities Global Summit on Tuesday.
Vitol’s Hardy said that the shift to more diesel consumption over petrol on the continent had helped to create shortages of the fuel.
“The thing that everybody’s concerned about will be diesel supplies. Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East,” said the chief of Switzerland-based Vitol. “That systemic shortfall of diesel is there.”
Törnqvist added: “Diesel is not just a European problem, this is a global problem. It really is.”
Hardy said that refineries could boost their diesel output in response to higher prices at the expense of other oil-derived products to shore up supply, but acknowledged that rationing was a possibility.
While diesel shipments continue to flow out of Russia, shipbrokers have predicted that supplies from Middle Eastern, Indian and US Gulf refineries would rush to fill the gap left by fewer Russian diesel exports to Europe. Even refineries in East Asia are eyeing exporting to Europe to profit from soaring diesel prices.
The UK, which relies on Russia for 18 per cent of diesel consumption versus 8 per cent of the country’s total crude oil demand, has committed to phasing out Russian oil and its products by the year-end.
Britain’s diesel pump prices have jumped 40 per cent over a year to the highest on record at 176.76p per litre, according to auto services group RAC.