Thursday, May 19, 2022

A diesel Shortage will only make supply chain problems worse

Whether it is cargo ships on the ocean or Semi trucks on U.S. highways it is diesel that is primarily used on land and sea to haul heavier cargos wherever you are most places on earth. So, if diesel shortages appear these problems could get worse.

However, if the buying spree people are presently on because they are happy (at least in the U.S.) to be temporarily free somewhat from Covid continues then diesel shortages likely will continue for some time. Also, the U.S. is shipping more oil overseas to Europe now which likely is making diesel shortages worse here in the U.S. as well.

However, we are presently in a war time economy and might be for years to come.

Though it is debatable whether a new Cold War creates a War time economy I don't think anyone would disagree that we are presently fighting a proxy war in Ukraine and have already sent at least 50 billion dollars in weapons for the Ukrainians to fight even though Russia's whole military budget is only 61 billion dollars. So, that is something to think about too.

We are shipping oil to Europe now primarily because their main source for oil products has been cut off now by Russia for various reasons. And the problem is European economies have already gone into recession partly because of this and it's possible the U.S. isn't far behind. 

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