‘Some cities could be dry for a few days’: Diesel supplier warns US East Coast companies to prepare for diesel shortage after Russia halts imports
- Mansfield Energy has issued the advice to ensure companies are prepared
- Companies have been told to take steps to plan for a potential lack of supply
- Main reason for shortage is that Russia is cutting diesel imports to the US
- Also caused by high distal demand, refinery maintenance and lower capacity
A diesel supplier has warned companies on the US east coast that a shortage could develop for a few days after Russia halts imports.
Mansfield Energy, the supplier, led by CEO Michael Mansfield, issued the advice to ensure companies are prepared.
Companies dependent on the fuel have been told to take measures to avoid the potential shortage of supplies usually caused by Russia cutting imports.
This means that companies do not receive the large number of petroleum products that they were before the invasion of Ukraine.
It has had an impact on refineries as they have had to shift production of gasoline to make some diesel. This means that they can almost run out of gas.
The diesel shortage is also caused by high demand for distallate (fuel oil and diesel), refinery maintenance and lower refining capacity.
Mansfield Energy, the supplier, advised to ensure companies are prepared. Pictured: The Strategic Petroleum Reserve storage in Texas
The company also said consumers may be affected by the high prices when they refuel their cars. Pictured: Pennsylvania fuel costs on October 19
Why does America have a diesel shortage?
High demand for distallate (heating oil and diesel) at low stocks.
Refinery maintenance – this occurs in the spring and fall and means reduced capacity.
Capacity has declined in recent years due to the closure of a number of unprofitable refineries.
The main reason is the shutdown of Russian imports.
Prior to the Russian invasion of Ukraine, the US was importing nearly 700,000 barrels per day of petroleum and petroleum products.
Most of those imports were finished products and refinery inputs boosting US distillate supplies
Mansfield Energy first mentioned the potential diesel shortage last week. The company wondered whether the lack of fuel could be due to “poor pipeline transport economies.”
And they added that there was also a low supply of reserves with only 25 million barrels in storage at the moment.
This is compared to the usual 50 million barrels along the East Coast.
Mansfield Energy warned in a press release Monday that prices will rise due to the lack of diesel supply.
It added that due to the spike in prices, demand will decline to the point where it will balance out with limited supply.
The company also said consumers may be affected by the high prices when they refuel their cars.
However, they added that after a few days of shortages, diesel will still be available to businesses.
Mansfield Energy said the supply chain within the fuel industry is dynamic and suppliers will work to fill the supply gaps.
People were told by the fuel supplier not to panic and to only order more if necessary.
The company said people in most areas will have normal access to fuel.
In cases where a large storage tank is not available, the fleet may be out of service if the fuel supplier runs out of fuel.
Mansfield Energy reassured consumers that gas stations will usually find supplies and continue to operate. Pictured: A strategic petroleum reserve storage at the Bryan Mound site in Texas
Companies can protect their fuel supply and reduce the risk of outages by issuing emergency fleet cards.
These provide traceable access to fuel. They can also use a small tank for emergency fuel.
Mansfield Energy reassured consumers that gas stations will usually find supplies and continue to operate.
It added that for this reason, it is unlikely that gas stations will have bags over the pumps and that the ongoing main impact is likely to be higher prices for customers.
It comes as Biden considers restricting US fuel exports to lower prices and restore stocks.
But this is an idea not supported by refineries. They have said that this measure would likely lower inventory levels.
The refineries added that it would reduce domestic refining capacity and put pressure on consumer fuel prices and alienate US allies during the war in Ukraine.
Last week, Tom Kloza, Global Head of Energy Analysis at OPIS, spoke to USA Today.
He said, “If we don’t stock up between now and the end of November, the wolf will be at the door.”
“And it’ll look like a big ugly wolf if it’s a cold winter.”