Diesel fuel has a greater energy density per gallon than gasoline. It achieves higher compression, without need of spark plugs for ignition, and much greater pulling power for a vehicle traveling at low speeds. Overall, diesel fuel is 25-30% more energy-efficient than gasoline. But now it is, not its normal 5-10% more expensive, but 50% more expensive—in the United States, its price is averaging just a fraction of a cent under $6/gallon retail. There are shortages of the fuel spreading everywhere, with the one exception, at least for now, being China.
It is frequently remarked that “the economy runs on diesel”: commercial transportation in all its forms from roads to watercourses and ocean seas, machinery, agricultural equipment of all kinds, generators for hospitals, schools, and other large buildings, industrial power, military equipment, etc.
If the prices of crude oil, in recent months until the past two weeks, have not changed much, despite outbreaks of war and blockages of the straits in the Middle East, it is because refineries are the only customers of crude oil, and the oil products produced by refineries are going into shortages and price spikes; or, in Russia and Ukraine, the systems of refineries themselves are being effectively attacked. The demand for crude oil is thus being step by step destroyed, so that its price does not respond.
Building new refineries is effectively blocked in the United States by oil companies lacking capital they are willing to invest. Some headllnes:
OilPrice.com: “Why oil majors don’t want to build new U.S. refineries.”
Gulf News: “Why oil companies are not rushing to build new refineries despite Trump’s push.”
Yahoo Finance: “Why more Venezuelan Oil Won’t Solve America’s Problem.”
CNN: “Refining crunch keeps fuel prices high as crude retreats” (in price).
OilPrice.com: “Global Diesel Supply Crunch Is Set to Last Through Winter.”
In brief, major oil firms and other large investors don’t want new capacity; they would prefer to wait, creating a severe physical-economic problem for agriculture and such industry as remains in the United States.
This has been forecast by EIR for months—that by the late fall, shortages of all oil products, and particularly diesel fuel, would cause the development of a global food crisis as bad or worse than that of 2005-08, unless the war policy of the West, and the economic policies of the United States, are changed.