No, things don’t look good at all. Winter is approaching and the West finds itself mired in an energy crisis that few could have imagined: the war against Iran has accelerated that warning that “the era of oil is coming to an end,” but not because demand is falling, rather because supply is already tight.
France has warned that it is running out of diesel, while countries like Italy or the Czech Republic are implementing measures to curb the rise in fuel prices. Things are so bad that even Donald Trump has asked Ukraine to stop bombing Russia’s energy infrastructure.
Europe runs out of Russian and Middle Eastern diesel
We find ourselves at such a delicate moment that the markets have decided to adopt a tense calm. They hope that the situation between the US, Israel and Iran on one side, and Russia and Ukraine on the other will improve, and they are optimistic. The other option is to succumb to chaos (and for Brent crude to spike or collapse).
That is why we are seeing slight declines in the crude market at any step toward negotiations, toward a ceasefire. But it does not arrive. The stalemate of the war in the Middle East and the fact that Saudi Arabia has had to close a key oil pipeline after an Iranian attack are pushing oil reserves to the limit, but above all diesel reserves.
And the problem isn’t just that the main shipping routes for oil tankers are blocked; Ukrainian bombardments are destroying Russian refineries that supply us with diesel. In France there are already 1,500 service stations that have informed the government they are in a state of supply shortage. The most affected region is Pays de la Loire, where an average of 20% of gas stations have been affected.
Energy Deputy Minister Maud Bregeon stated that “many drivers flock to these gas stations en masse, which leads to a surge in sales. The station has no time to replenish, which generates panic.” The vast majority of SP95-E10 supply difficulties are currently concentrated at TotalEnergies stations, with 33 percent out of fuel on September 17.
Specifically, the 16% of the 10,000 service stations registered in France have run out of gasoline or diesel (or both) on the 20th of this month, while diesel prices in Europe hover around 2.4 euros per liter. France, the Czech Republic or Italy are some of the countries implementing measures to cushion the blow.
The measures of some countries: price caps, tax elimination
In Spain the liter of diesel already exceeds two euros on average at many gas stations – especially at the major distributors like Repsol or BP – while at the low-cost chains both gasoline and diesel remain around 1.8 euros on average. It will all depend on whether the Government decides to extend the subsidies, valid until September 30.
Graphic: Euro News.
The Czech government has announced a cap on fuel prices, while the special diesel tax would be reduced “to the minimum allowed by EU rules”. Italy, for its part, has exempted vehicle tax starting in 2027 for 13.2 million cars and 1.1 million motorcycles.
The United States, which started the war in February, is getting a taste of its own medicine: diesel prices have surged by 94%, surpassing $200 per barrel in early September.
Still, there are many possibilities that demand destruction could occur: consumers cannot afford to fill up their tanks amid a sustained rise and a reduced supply, and they turn to other means.
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