Europe is cutting more energy ties with Russia. It’s banning Russian refined oil products like diesel fuel, which comes along with a Western price cap. The goal is to stop feeding Russia̵…
By David McHugh | Associated Press
Most things people buy or eat are transported at some point by trucks, which mostly run on diesel. It also powers farm equipment, city buses and industrial equipment. The higher cost of diesel is built into the price of almost everything, helping push up inflation that has made life harder for people worldwide.
New refinery capacity coming online this year in Kuwait and Saudi Arabia and next year in Oman also could help. India is another potential source.The price cap plays a key role in the embargo: It’s designed to keep Russian diesel from disappearing from the global market and causing a price spike for everyone, while still cutting into the income that supports Moscow’s military.
In practice, markets will have to adjust, and there could be a brief spike. For one, tankers would have a longer journey to Europe from the U.S., Middle East or India than from Russia’s Baltic Sea ports, stressing shipping capacity. Rast Reisen, the bus and travel company near Freiburg im Breisgau in southwestern Germany, has seen diesel fuel rise from 12%-15% of costs to 20%-25%.
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