Iran, in response to the global diesel shortage caused by sanctions and political crises, has turned to new solutions. Global fuel reserves are likely at their lowest historical levels. China has recently banned the export of all types of fuel for this month. Russia has also halted diesel exports for months. Additionally, the United States has threatened to ban diesel exports to European countries if they do not release part of their stored fuel.
Energy Crisis and Resource Nationalism
The current crisis revolves mainly around fuel supply, with countries striving to prioritize their domestic needs. The issue of "resource nationalism" in the energy sector is significantly on the rise. Governments of resource-rich countries are acting more proactively to achieve the best agreements with private companies. However, when it comes to energy, the main issue is meeting domestic fuel demand. Diesel plays a vital role in all economies worldwide and has become a fundamental priority.
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Analysts had warned as early as April that the crisis resulting from the U.S. and Israeli aggression against Iran would primarily harm fuel supply. In September, the price difference between diesel and crude oil reached an unprecedented record of over $100 per barrel. There is not enough refining capacity to compensate for the shortage of petroleum products in the Middle East, and Volodymyr Zelensky, the President of Ukraine, has recently announced that attacks on Russian refineries will be intensified.
Consequences and Reactions
These developments have driven diesel prices, especially in the U.S., to their highest levels, sparking discussions about the possibility of banning diesel exports to maintain domestic market balance. In response to this situation, the European Union was pressured to release 100 million barrels of crude oil, diesel, and gasoline from its reserves. Although this action led to a slight decrease in prices, the situation for European countries is much worse, as most are heavily reliant on imported fuel.
Currently, the supply of crude oil and refined products in other parts of the world is limited. This situation will be exacerbated immediately by China's fuel export ban and the extension of Russia's diesel export ban. In this context, the U.S. becomes the only major source of refined fuels and is trying to curb domestic prices. Energy security has once again become a primary concern for various countries, even those that have been pioneers in the decarbonization movement.
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