The issue at the forefront today is a distillates and diesel fuel shortage that’s taking hold on the United States east coast and spreading across the country. Wholesale suppliers have already begun the process of rationing fuel oils to try and avoid a supply chain catastrophe in the U.S. this winter. I suggest readers review the history that led to this crisis in “A Diesel Fuel Shortage Storm on Top of Record-High Prices” Part 1 and 2 (Twitter thread) published in May and June of this year. Here is an excerpt from Part 1 with updated hyperlinks to recent reports and articles:
“There is a lot of blame to go around and not limited to Biden’s destruction of U.S. energy independence that’s bleeding the Strategic Petroleum Reserve (SPR). We have an out-of-control monetary policy at the Fed and fiscal mismanagement on Capitol Hill, a stagflationary global economy on the brink of recession, a pandemic mired by an experimental intervention that’s deadly, an ongoing supply chain crisis, and war in Ukraine due to inept national security policy with damaging rhetoric from both sides of the pond that’s increasing the fear of a nuclear exchange. When you add those factors to the unmitigated shutdown of six refineries in the U.S., the upcoming closure of a seventh, and only one new oil refinery ‘with significant downstream capacity’ built since 1977, it’s no wonder the potential for a diesel fuel shortage is on the horizon.” – TraderStef
Just over a week ago, the Biden regime’s energy advisor, Amos Hochstein, admitted on CNN that their agenda is “to see the United States petroleum industry increase oil production” in the near term, but the endgame is to limit production of fuel-derived energy to “make sure that we’re in a better footing to accelerate the transition” to a green energy economy. That should come as no surprise to anyone struggling with inflation due to the administration’s Green New Deal energy policy because the Democrat-socialist politicos and Joe Biden openly pledged an end to the oil industry before and throughout the 2020 presidential election campaign. The apparatchiks are also urging Biden to nationalize the oil and gas industry.
“No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill. Period. Ends.” – Joe Biden, Feb. 2020
Assault On Oil Is No Accident And It’s Not Putin – Senator Ted Cruz, Apr. 2022
Two weeks ago, JPMorgan CEO Jamie Dimon appeared on CNBC and emphasized that the U.S. must pump more oil to avert a war-level energy crisis. “It’s a longer-term problem now, which is the world not producing enough oil and gas to reduce coal, make the transition, and create security for people. This should be treated as a matter of war at this point, not as nothing short of that.” He is right, but it does not solve the current lack of capacity to refine enough petroleum into distillates to meet domestic needs.
It was reported this week (EIA Weekly Petroleum Status Report) that diesel and distillate fuel stocks had fallen to record-low levels as the U.S. was busy exporting a lot of diesel fuel and natural gas to help alleviate Europe’s energy crisis that’s facing “A Dark Age Winter of Discontent ” (Twitter thread). Numerous articles hit the nail on the head when noting the lack of U.S. refining capacity to satiate domestic demand. U.S. energy executives have informed the White House that shuttered oil refineries won’t restart and put the “latest nail in the refinery coffin… Building a refinery is a multi-billion dollar investment. It may take a decade. We haven’t had a refinery built in the United States since the 1970s. There will never be another refinery built in the United States… In a policy environment where governments around the world are saying we don’t want these products to be used in the future.” Remember, the Great Reset (Twitter thread) plan is for you to own nothing and be happy, eat bugs and fake meat, and the sale of hydrocarbon vehicles is slated to be banned in Europe and the U.S. by 2035.
The Biden administration cannot readily mitigate the diesel fuel and/or home heating oil shortage and blunt price increases by releasing distillate fuel oil reserves as was done with the SPR crude oil stocks to increase supply and lower prices at the gasoline pump.
White House to Tap Oil Reserve Again Amid High Fuel Prices… “The Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the nation’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing further.” – Bloomberg, Oct. 17
Saudi Arabia: Oil Shortage/Inflation Due to U.S. Releasing Reserves – Reuters, Oct. 17
Diesel Crisis Deepens As Inventories Fall To Dangerous Levels… “While the OPEC+ agreement to cut crude oil production and the U.S. reaction to it dominate headlines, a much more immediate crisis is getting worse by the day. Global diesel and other distillate fuel stocks have been on the decline for a while now, and there is no reversal of this trend in sight. Demand, on the other hand, has been growing, leading to a widening shortage… In the United States distillate stocks have fallen to 106 million barrels, which is the lowest since records of these stocks began back in 1982… supply is not going up fast enough because there is not enough refining capacity for it to go up fast enough or even meaningfully enough. And this spells a lot more trouble for both Europe and the U.S., especially in the inflation department.” – OilPrice.com, Oct. 18
Joe Biden’s Big Diesel Problem… “The last time there was this little supply of diesel fuel, there were about 3.5 billion fewer people on the planet.” – NY Magazine, Oct. 20
The US Diesel Crisis Is Here and It’s Spreading Along the East Coast… “The diesel shortage that had the White House on edge last week is spreading from the Northeast to the Southeast, prompting at least one supplier to initiate emergency protocols. ‘Because conditions are rapidly devolving’ fuel supplier Mansfield Energy is now requiring a 72-hour notice for deliveries to secure fuel and freight, according to a note to customers. In areas that are tightest, fuel prices are running 30-80 cents higher than the market average, Mansfield said, adding that Tennessee is ‘seeing particularly acute challenges. At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity,’ the note said.” – Bloomberg, Oct. 25
Energy Rationing Arrives in America… “Some wholesalers in Connecticut have already put a limit on the amount of available fuel and must ration their customers’ consumption. Former Maine Gov. Paul LePage is urging the current Democratic Gov. Janet Mills to beg Washington for assistance before it is too late. ‘Today, we got information from a local oil dealer… heating oil right now, is $5.69. Kerosene is $6.69 a gallon. This is what we’re facing right now,’ LePage said. Republican state rep nominee Mike Grant called the current issue a crisis. ‘As we enter home heating oil season, diesel prices are nearing $6 per gallon. This is a nothing short of a crisis for CT families. To make things worse, in 72 days, the CT Dems will begin taxing home heating fuel trucks for delivering your oil to you. More inflationary pressure!’ he tweeted. – Armstrong Economics, Oct. 25
What ‘Backwardation Has to Do With US Diesel Squeeze… “The Biden administration could release 1 million barrels of fuel from its strategic fuel reserves in the Northeast. That could help the region in a pinch, but the relatively small volume available in the diesel reserve means the relief won’t last very long: At the current national demand level, 1 million barrels of diesel fuel will be gone in less than 6 hours.” – Washington Post, Oct. 26
Diesel shortage across the US? Reports say only 25 days of supply left… “Price increases and shortages of U.S. diesel are likely to emerge unless and until the economy and fuel use slow down… in October, stockpiles reached a record seasonal low of only 25 days of supply. This is the lowest since 2008. The Northeast-to-Southeast diesel shortfall that last week alarmed the White House is forcing at least one supplier to implement emergency procedures… While stocks of diesel fuel—used for heating and trucks—remain at the lowest level ever for this time of year, gasoline inventories are at an 8-year seasonal low… As winter approaches, diesel inventories nationally are at their lowest seasonal level ever, and certain regions in the Northeast have started fuel rationing. The scarcity will almost certainly result in higher heating and transportation fuel costs, further taxing household finances.” – Economic Times, Oct. 28
A great chart book to review was released by John Kemp at Reuters on U.S. distillate fuel oil inventories and selected indicators. There’s not much we plebeians can do but stock up on non-perishable items in your food pantry and keep all fuel tanks topped off at all times. Lastly, get out and vote in the Nov. 8 midterm elections and make a difference after reading “Abiotic Black Gold Vs. U.S. Midterm Elections.”
U.S. is about to run out of diesel fuel – Tucker Carlson, Oct. 27
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Headline Collage Art by TraderStef