Russia Resumes Diesel Exports
Global politics is weird.
One of the key reasons why diesel prices at home are so high is because of geopolitical tensions. Russia is invading Ukraine, and as such trade between Russia and western countries such as the United States has been stymied. It looks like that may be coming to an end, as Russia announced the reopening of diesel exports to the rest of the world, provided anyone is willing to buy it.
Details
The news comes about three weeks after Russia announced an across-the-board ban on exporting diesel and gasoline, preferring to keep it at home for domestic use. It has since updated its policy on the matter, saying that petroleum extractors and refiners must keep at least 50% of the fuel within country borders, but is free to sell to the highest bidder the other half abroad. The move is anticipated to bring 630,000 barrels of petroleum to other nations every day.
Even if the United States refuses to directly do business with Russia due to sanctions placed as a result of the war in Ukraine, a returning contender to the global petroleum market is all but destined to cause prices to fall, as other countries such as those in the Organization of Petroleum Exporting Countries such as Venezuela have to compete again.
Conclusion
The result will all but certainly be a much-needed decrease in fuel prices at the pump for truckers and fleets alike. We say “all but” because we still live in unprecedented economic times, where not too long ago a trucker could purchase a truck, drive it for 400,000 miles, and sell it for more than it was bought, but assuming the basic principle of supply and demand holds true, we will see some relief for refueling.
There is also the possibility of one day the United States resuming its own drilling and fracking to avoid needing to import it, but as it stands right now, the Biden Administration is more interested in promoting alternative fuels such as electricity and hydrogen-powered vehicles. We will just have to wait and see what happens in 2024 to better predict the trajectory of the trucking industry’s use of energy.
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