Reasons for Faster Rise in Diesel and Gasoline Prices
The article discusses how gasoline prices have risen more than crude oil prices due to pressures and tensions in the global refining markets, stemming from the war in Iran and the events in Ukraine. The conflict with Iran has disrupted navigation through the Strait of Hormuz, which handles about 20% of the world's oil supplies, leading to partial or full shutdowns of Gulf oil refineries. This has reduced the supply of petroleum products. Additionally, missile strikes on Russian oil refineries in Ukraine have caused drops in diesel and gasoline production, while American oil inventories have fallen to their lowest levels since 1984 due to storage pressures and increasing summer market demand. The International Energy Agency has indicated that inventory draws are ongoing, warning that gasoline and diesel supplies will remain limited during the summer, and that restoring refinery operations could take a long time. Overall, geopolitical tensions and conflicts have caused fuel product prices to rise more sharply than crude oil prices, with expectations that this situation will continue, leading to shortages and inflation of prices worldwide.
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