What You Need to Know About Global Diesel Fuel Shortages

The world’s production of diesel fuel struggled to keep pace with demand through 2023. The subsequent impact on both availability and price can make a real dent in the cost of doing business for many of our clients. We began to see some relief towards Q1 2024, but we’re not out of the woods yet.

What Caused The Diesel Fuel Shortages in 2023 & 2024?

The global oil market is a complicated beast. As tempting as it may be to look at the demand for U.S. diesel fuel delivery in isolation — we live in an increasingly interconnected world. Unfortunately, we don’t have total, granular control over the price of a barrel of oil, whether it was pulled out of the ground in Kuwait or the Kuparuk Oil Field in Alaska. 

The shortages of diesel fuel in the U.S. in 2023-2024 can be attributed to three main factors:

• Reduced Oil Production: The Organization of Petroleum Exporting Countries (OPEC) and Saudi Arabia implemented crude oil production cuts through 2024, leading to lower overall oil production. These production cuts affected the availability of diesel fuel.
• Post-Pandemic Demand Surge: Sure, the pandemic has been over for a while, but the ripple effect is still having some after-effects on oil prices and the availability of diesel fuel deliveries. Post-pandemic, there was an increase in demand for diesel fuel, but it took production a while to catch up with demand for several reasons, from operations being suspended to labor shortages due to people recovering from COVID-19. 
• Manufacturing Activity Trends: GDP growth and manufacturing have long been positively correlated with diesel demand. Simply put, more manufacturing and growth in U.S. exports usually increase the demand for diesel fuel suppliers in Texas and throughout the country. The pandemic slowed everything down, including oil production and the number of diesel deliveries. The U.S. economy’s recovery upswing has been in services more than manufacturing and exports. That means less potential demand for diesel, which can cause production to decline in an attempt to level out supply and demand to control prices. 

Other Factors Affecting Availability of Diesel Fuel, DEF, and Biofuels

It’s important to remember that oil drilling and refining to create diesel fuel cannot happen at the drop of a hat. Controlling diesel fuel production is a bit like trying to steer a giant ship. It takes a while from when you turn the wheel until you see the nose of the ship turning. That also means you need to plan a bit and try to predict future demand. The oil companies and refiners don’t always get it right. No one can. So supply and demand are still major factors in how much diesel fuel distribution can happen and what prices will look like. 

The War in Ukraine

The Russian incursion into Ukraine has affected both the availability and price of diesel fuel to some degree. First, Russia is one of the world’s major oil suppliers and they are now prevented from getting oil to market in many countries due to international sanctions. For now, most Russian oil is going to China and India. War also requires a lot of oil, which means some sources may be diverted to the war effort. 

Infrastructure and Transportation Challenges

In the U.S. changes to railroad activity, especially in the West, have caused some shortages of DEF and biofuels, including biodiesel and renewable diesel in the past. There continues to be some uncertainty there. As hard as it is to believe, we’re still not entirely past some of the supply chain problems that came to a head during the pandemic. 

Unforeseen Circumstances

The market can adapt to and even predict some trends in demand and adjust supply at the production end in advance. But, there’s no way to be certain of every factor that could impact the supply of oil or diesel fuel in the U.S. or global market. The war in Ukraine was thought to be a possibility, but it didn’t seem like a foregone conclusion until Russian troops began massing on the border. 

Accidents at refineries or other critical links in the supply chain are also nearly impossible to predict and plan for. Industrial sites may experience fires or even terrorist strikes. Major oil production disruptions at oil rigs, like the Deepwater Horizon can have some impact too. Finally, there are natural disasters — again very tough to predict and they can affect any part of the supply chain from the oil rig to the refineries, diesel fuel suppliers, and service stations. 

Mansfield Service Partners: The Diesel Fuel Supplier of Choice  

Reliable diesel fuel delivery is a necessity, not a luxury for America’s business and industry. Having a diesel supplier you can trust to get fuel where you need it when you need it there, 24 hours a day means real peace of mind for everyone from the fleet manager to the CEO.

Mansfield Service Partners has been the diesel fuel supplier of choice for American business since 1932. From 24-hour fuel delivery to industrial lubricants, DEF, and environmental services, like used oil collection — we’ve got what you need when you need it. 

Contact Mansfield Service Partners for your business today. Reach us at (800) 683-1331 or email any inquiries to info@mansfield.energy