It is no surprise to anyone that crude oil prices and, by extension, those of its refined products are reaching record levels. A new world event may just be another cog in the machine of rising diesel prices, that being the Russian invasion into Ukraine.
Countries across the globe, including the United States, are waging economic war on Russia in response to its invasion of Ukraine. Among the top three oil-exporting countries in the world, Russia typically provides a little less than 10% of America’s crude oil imports, according to Energy Information Administration data. With the United States limiting domestic production in pursuit of clean energy, an oil embargo from Russia may just lead to crude oil and diesel prices rising.
The first law of economics is the intersection between supply, demand, and price. As the United States supply of oil decreases by about 10%, prices and demand will inevitably shift as well.
What Can be Done?
While it might seem as though the solution is to simply source the oil from other countries such as Saudi Arabia and Canada, those countries export oil to other countries as well, and as such the global market would be competing for a smaller number of barrels by shunning Russia.
The only real way to make an impact on oil prices is for demand to drop. For drivers who run on gasoline to go to the grocery store this may be feasible, but in the world of trucking where diesel is king and alternatives still need more time to develop, the only option is to squeeze as many feet of travel out of each drop of diesel fuel.
The absolute worst-case scenario of sanctions regarding crude oil would be a repeat of the gas shortages in the 1970s, where drivers could only purchase fuel on certain days depending on their license plate. The amount of oil imported cut then was larger than it would be from Russia today, but where the remaining non-Russian oil goes would determine what happens during an embargo.
For now, the best that truckers can do is take steps to increase fuel efficiency on their vehicles. Driving no faster than 55 miles per hour and reducing idle time are some of the best steps fleets can take to lower their expenses at this time.
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