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The United States has only 25 days’ supply of diesel, a situation that has left reserves at their lowest levels with the serious risk of shortages crippling the economy.
According to the Energy Information Administration (EIA), in just four weeks the United States reduced its supply by 9 days. A month ago it had 34.2 days and now it has 25 days left.
The diesel crisis comes just three weeks before the November 2022 midterm elections and will likely drive prices even higher. Diesel is the fuel used by freight trains and commonly employed by long-haul truckers transporting goods and food.
Diesel reserves at unacceptable levels
According to the EIA, “the crisis gripping the US diesel market is getting out of hand, as demand is surging while supplies remain at the lowest seasonal level for this time of year ever.”
Most of the daily products used by Americans are transported by diesel-powered trucks and trains; if this fuel becomes scarce at historic levels, it could severely affect and cripple the country’s economy, which has already been impacted by historic inflation.
Bloomberg’s Javier Blas noted that “such low levels are alarming because diesel is the workhorse of the global economy. It powers trucks and vans, excavators, freight trains and ships. A shortage would mean higher costs for everything from trucking to farming to construction.”
Blas points out that diesel reserves should be 30% higher than they are now.
Although the White House says it is very concerned about the coming diesel crisis, it appears not to be doing enough, beyond draining the Strategic Petroleum Reserve, which has no impact on diesel production.
“The U.S. government is going to buy oil to replenish the Strategic Petroleum Reserve when prices drop to $70 a barrel,” Biden said last Wednesday. “And that means oil companies can invest to increase production now, confident that they will be able to sell us their oil at that price in the future,” the president said.
The move came after the International Organization of Petroleum Exporting Countries (OPEC+) announced that it would reduce oil production in an attempt to drive the prices up.
Republicans accuse Biden of manipulating prices for political purposes
Members of the Republican Party hold the Democrats responsible for what is happening with diesel and point out that the Biden administration is manipulating prices for political purposes. Analysts also say it is unclear whether the plan to refill the reserve will achieve the administration’s goals.
“Now, after draining our emergency reserves to a 40-year low, Democrats want billions more of taxpayer dollars to refill the SPR at more than double the price. This is a direct attack on every single American struggling to fill their tanks and heat their homes,” Sen. John Barrasso (R-WY.) told the New York Post last week.
In a letter to Biden, Sen. Steve Daines (R-MO.) said Thursday that the administration’s decision to “deplete the SPR emboldens our enemies abroad and does little” to help Americans refuel.
“Manipulating energy reserves to bring gas prices down from historic highs as the midterm elections approach is not an accomplishment, it is a national security risk,” Daines said.
However, according to analysts at the Center for Strategic and International Studies, “while the Biden administration has been able to use the SPR to nudge down oil prices, it has hurt its own effort to lower prices by giving unclear signals about domestic production and the possibility of an export ban of gasoline and diesel fuel.”
Sabrina Martín Rondon is a Venezuelan journalist. Her source is politics and economics. She is a specialist in corporate communications and is committed to the task of dismantling the supposed benefits of socialism // Sabrina Martín Rondon es periodista venezolana. Su fuente es la política y economía. Es especialista en comunicaciones corporativas y se ha comprometido con la tarea de desmontar las supuestas bondades del socialismo