‘Some cities could be dry for a few days’: Diesel supplier warns US East Coast companies to prepare for diesel shortages after Russia halted imports
- Mansfield Energy issued the recommendation to ensure companies are prepared
- Businesses have been told to take steps to prepare for a potential shortage of supply
- The main reason for the shortage is that Russia is stopping diesel imports to the USA
- Also caused by high distalate demand, refinery maintenance and lower capacity
A diesel supplier has warned companies on the US East Coast that shortages could occur for a few days after Russia halted imports.
Mansfield Energy, the supplier led by CEO Michael Mansfield, issued the recommendation to ensure companies are prepared.
Businesses dependent on the fuel have been ordered to take steps to plan for the potential shortage of supplies, largely caused by Russia halting imports.
This means that the companies will not receive as many petroleum products as they did before the invasion of Ukraine.
It impacted refineries as they had to switch production from gasoline to diesel. This means they may run out of gas.
The diesel shortage is also caused by high demand for disstallates (heating oil and diesel), refinery maintenance and reduced refinery capacity.
Mansfield Energy, the supplier led by CEO Michael Mansfield, issued the recommendation to ensure companies are prepared. Pictured: Mansfield Energy headquarters
Businesses dependent on the fuel have been ordered to take steps to plan for the potential shortage of supplies, largely caused by Russia halting imports. Pictured: The Strategic Petroleum Reserve storage facility in Texas
Also, the company said consumers may be affected by high prices when filling up their cars. Pictured: Fuel costs in Pennsylvania on October 19
Why does America have a diesel shortage?
High demand for distalates (heating oil and diesel) with low inventories.
Refinery maintenance – this happens in spring and fall and means reduced capacity.
Capacity has declined in recent years as several unprofitable refineries have closed.
The main reason is the disruption of Russian imports.
Before the Russian invasion of Ukraine, the US was importing almost 700,000 barrels a day of petroleum and petroleum products.
Most of these imports were finished products and refinery inputs that boosted the US distillate supply
Source: Forbes
Mansfield Energy first mentioned the potential diesel shortage last week. The company had questioned whether the fuel shortage was due to “weak pipeline shipping economics.”
And they added that with just 25 million barrels currently in storage, there is also little reserve supply.
This compares to the usual 50 million barrels along the east coast.
Mansfield Energy warned in a press release on Monday that prices will rise due to a lack of diesel supply.
It added that due to the rise in prices, demand will fall to the point where it will even out with limited supply.
Also, the company said consumers may be affected by high prices when filling up their cars.
However, they added that after a few days of shortages, there will still be diesel for business.
Mansfield Energy said the supply chain within the fuel industry is dynamic and that suppliers are working to fill supply gaps.
People have been told by the fuel supplier not to panic and only reorder when needed.
The company said people will be able to access fuel normally in most areas.
In cases where a large storage tank is not available on site, the fleet may be out of service if the fuel supplier runs out of fuel.
Mansfield Energy assured consumers that for the most part, gas stations will find supply and remain operational. Pictured: A strategic petroleum reserve at the Bryan Mound site in Texas
Businesses can protect their fuel supplies and reduce their risk of downtime by issuing emergency fleet cards.
These enable traceable access to fuel. You can also use a small tank for emergency fuel.
Mansfield Energy assured consumers that for the most part, gas stations will find supply and remain operational.
She added that for this reason, gas stations are unlikely to have bags over the pumps and the main ongoing impact is likely to be higher prices for customers.
It comes as Biden considers capping US fuel exports to lower prices and replenish inventories.
However, this is an idea not supported by refiners. You said that this action would likely reduce inventories.
The refiners added that it would reduce domestic refining capacity and put pressure on fuel prices for consumers and alienate US allies amid the war in Ukraine.
Last week, OPIS Global Head of Energy Analysis Tom Kloza spoke to USA Today.
He said: “If we don’t build stocks now by the end of November, the wolf is just around the corner.”
“And it’ll look like a big, ugly wolf if it’s a cold winter.”