How the Biden administration addresses the shortage of distillate fuel oil in the United States will show if President Joe Biden will put America first, said an industry insider.
“From the consumers’ standpoint, [it will show] who the Biden administration protects most, Europeans or their own citizens?” John Hunt, who worked in the energy trade area, told The Epoch Times.
U.S. Energy Information Administration (EIA) data shows that diesel stockpiles are at their lowest level for October in records that date back to 2008.
The weekly data shows that the United States, as of Oct. 21, has 25.9 days of supply—down from 34.2 days of supply five weeks prior.
Some proposed banning diesel exports to increase domestic supply.
The United States exports of distillate fuel oil increased from 110,000 barrels per day to almost 1.2 million barrels per day from 2004 to 2021, with an annual growth rate of 15 percent.
Distillate fuel oil is a term used for a range of refined products including diesel, heating oil, and fuel oils used for electric power generation.
Data collected by EIA shows the biggest importers of U.S. distillate fuel oil are in South America including Mexico, Brazil, Chile, Argentina, and Peru.
Some European countries like the United Kingdom and the Netherlands imported more from the United States in recent months after decades of decreasing imports.
The Russia-Ukraine war and the anticipated ban on Russian energy most likely are the driving force behind the changes in European imports of American distillate fuel oil.
It will certainly alleviate the tight market if the White House bans certain types of distillate fuel oil exports, Hunt said.
However, he doubted the current administration was willing to do it.
“Banning the distillate fuel oil exports for two months will drive the supply to the normal level,” he said. “But politically it’s something that the current administration will not do. It will be very hard, we have been supporting Europe facing the Russian cutoff of energy supply.”
By Allen Zhong