President Biden can force America’s fuel suppliers to keep minimum stock levels in stock In anticipation of a potential price spike this winter, as diesel stocks in the Northeast have fallen to dangerously low levels, Energy Secretary Jennifer Granholm told Bloomberg on Tuesday.
While the US remains a major exporter of diesel to European allies facing an energy crisis, “we also want to make sure there’s enough fuel in the US,” Granholm told Bloomberg in an interview at… COP27 climate conference in Egypt.
Granholm’s comments are most obvious that Biden is looking at inventory requirements as inventories of distillate products on the US East Coast, including diesel and heating oil, are at their lowest levels reported. recorded at this time of year and inventories in New England were less than a third of normal levels.
But some analysts believe this move will backfireas such a requirement would essentially remove the fuel supply on the market today and move them into storage tanks for safekeeping, in a change that could create an increase in demand in the short term. short time and thus increase the price.
Before the US banned Russian oil in March, they imported ~700k b/d of oil from the country, ~20% of which was refined, but now they are competing with international buyers. Other economies are looking to replace the lost Russian supply.
On a global scale, the International Energy Agency says unprecedented diesel prices mean possible fuel consumption needs.
“This increasingly ominous global outlook, coupled with very high prices, will significantly reduce diesel demand by 2023,” the IEA said in its latest report. monthly report on the state of the oil market.