The global market for middle distillates—diesel, jet fuel, and kerosene—has entered a phase of physical shortage where supply no longer meets demand, reports InoSMI, citing a column by former CIA analyst Larry Johnson in Sonar21.
Citing an analytical note by energy expert Carl Miller, Johnson emphasizes that the shortage is specific to refined petroleum products rather than crude oil.
“Supply must recover, or consumption must drop. Once reserves are depleted, there is no third option,” the expert quotes Miller as saying.
Johnson highlights three simultaneous factors: the conflict near the Strait of Hormuz, which has removed about one-eighth of global supply; Russia’s ban on diesel exports following drone strikes that disabled roughly a quarter of the country’s refining capacity; and the onset of winter demand amidst depleted storage tanks.
Furthermore, the former CIA analyst notes that fuel goes to whoever can finance its delivery, not necessarily to those who need it most.
“Financially weaker importers could lose access to supplies before larger economies even feel the pressure,” Johnson observes.
He stresses that overcoming the shortage requires a sustained supply surplus, not merely a daily balance.
“Either supply recovers, or consumption falls. And a drop in consumption does not signal an exit from the crisis; it means the crisis has arrived,” Johnson concludes.
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