Larry Johnson (@NewSonof): Trump is blaming Ukraine for a diesel shock that is coming out of the Gulf. The math does not work.
“We’ve heard Donald Trump in recent days make the specious, false claim that the diesel shortage is a consequence of Ukraine’s attacks on Russian oil refineries. Let’s be clear. Prior to the attacks on Russia’s oil refineries, Russia was exporting roughly a million barrels a day of diesel to a global market of 29 million barrels a day. In other words, 3%, which is not earth-shaking. Since then, Russia is now only exporting 150,000 barrels a day of oil, which is about half of 1%. If anybody out there wants to believe that half of 1% is why the price of diesel has doubled in the course of the last three months, then you need to go take a math class, because the math simply does not work.
Russia as a whole produces about 9 million barrels of oil a day. Of that oil, 7.2 million is what’s known as sour crude. That means it has a sulfur content of 0.5% or higher. That sour crude provides what they call the middle distillate oil, and from that you get both diesel and aviation fuel, among other things, kerosene as well. Refineries are specifically constructed to deal with different types of crude: heavy crude, 0.5% sulfur and greater, or sweet crude, less than 0.5%. The refineries for sweet crude really are not set up to create diesel and aviation fuel. Ukraine’s attacks on Russia’s refineries are not disrupting global supply, because Russia exports the sour crude, which goes to China, which goes to India, which goes to Japan, and it’s in those locations that that sour crude is refined and turned into diesel and aviation fuel.
So the war with Ukraine has absolutely nothing whatsoever to do with the rising price of diesel. That is a direct result of the shutdown of oil, also sour crude, that comes out of the Persian Gulf as well as coming out of the Red Sea through the pipeline at Yanbu. Yanbu is now dead, and it’ll probably be dead for at least the next two months.
In the past, back in the good old days before the start of the war, Saudi Arabia was exporting about 11 million barrels a day. They stopped doing that with the start of the war. Only in the last four or five weeks did they begin shipping oil through the pipeline out through the Red Sea outlet. Because of Ansar Allah’s control of Bab el-Mandeb, the strait to the south, the Saudis were compelled to take their crude through the Suez Canal and then through the Mediterranean and then a long journey around Africa to get on their way to Asia.
The world right now is facing a serious, authentic shortage of diesel and aviation fuel, and there is no way to make up that deficit. The major suppliers have been reduced by 20% because of the loss of the Persian Gulf, and that is not an amount that Russia can make up, or Canada can make up, or Mexico or Venezuela.
Let’s assume we get a miracle overnight: that Trump lifts the blockade on Iran, that Iran and all of the Gulf countries have not had any damage whatsoever to any of their oil and gas infrastructure, and that they can begin immediately to fill tankers and send those tankers off on their journey to the final destination where that oil or liquid natural gas will be offloaded and processed. Even if that would happen tomorrow, we are a minimum of two months—basically all of October and two-thirds of November, if not all of November—before you could even have hope that there would be a start of refilling the shortages, the storage tanks that are empty. In other words, even if it started flowing tomorrow, that would create a supply that in four to six weeks would be enough to satisfy current demand, but it doesn’t create the surplus that’s needed to sustain that demand and then pack away a surplus that could be used in the event of another crisis. That’s really how dire this situation is. And I don’t think the vast majority of people in the world, including energy experts in the West, understand or appreciate this.”
The City of London can print propaganda, but it cannot print middle distillate. The bill is already at the pump.
Iran: Exclusive source for Iranian television: One of Iran's conditions for opening the Strait of Hormuz is ending the war on all fronts of the resistance
Iran: Special source for Iranian television: A meeting was held between Araghchi and Witkoff on the sidelines of the United Nations General Assembly following the insistence of the American delegate
Jordan’s King Abdullah II — 'Israeli government's appetite is now a regional threat. And today, Syria is the warning'
'Israel is testing how far it can go'
Iran's Foreign Minister, Dr. Abbas Araghchi, and his delegation WALKED OUT before President Trump's Speech
It appears only one person stayed behind who stared down Trump the whole speech....
No1 on the diesel saga: US diesel hits an all-time record $6.51/gallon, up ~101% from the January low, with California at $8.42 (Barchart, KobeissiLetter, Hedgeye, zerohedge). France is at 16% of stations out of petrol or diesel, up from 11% on Saturday, 18% around Paris (HormuzLetter). Russia is set to extend its diesel export ban past end-September (chigrl). Confidence: HIGH (5+ sources)
Another one of Trump's bullshit deals falls apart. This time it is potash and Belarus. Lukashenko: “Everyone keeps saying: Ah, potash! Even if we wanted to supply [potash] to other, Western markets, we simply do not have those volumes — everything is contracted.”
Chad Gilbert, one of the founding members of the pop-punk band New Found Glory, died on Sunday at the age of 45, according to a post on the band’s Instagram page. https://t.co/woBIbZ1XTh