The national average for a gallon of gas continues to rise but has not hindered Americans from traveling. Experts are now sounding the alarm about a potential gas, diesel and jet fuel shortage this summer.
“Much lower refining capacity against strong demand is the fundamental problem, and it’s more related to that than it is to a very high price of crude oil,” said Paul Sankey, the lead analyst for Sankey Research.
Sankey says the issue is threefold – strong demand post-pandemic following a lull in travel, lower refining capacity, and crude oil’s high price.
“Refiners are struggling to know what to do because the diesel prices are so high that they’re making extra diesel, but that’s tightening the gasoline supply,” Sankey said.
In addition to that, Sankey said the U.S. witnessed several refinery closures due to explosions, weather damages and environmental concerns.
According to the U.S. Energy Information Agency, between 2020-2021, refinery capacity fell 4.5 percent to 17.7 million barrels per day, the lowest since 2013.
“Companies have been reluctant to put major investment into upgrading refineries because of the risk associated that everyone’s talking about, which is kind of the end of the oil age,” Sankey said.
Russia, the world’s second-largest oil producer worldwide, is no longer exporting its products directly to the U.S.
Should Americans worry about not being able to find fuel this summer?
“Yes, because you could get a major hurricane season that would shut down the US refining system on the Gulf Coast, you could get a major accident, hopefully not,” Sankey said.
An incident of this magnitude would not only impact people hitting the road but can leave summer flights in jeopardy of being canceled.
“We haven’t seen a full resumption of jet fuel demand globally,” Sankey said.