In late April a ship loaded with 55,000 mt of Indian wheat left India to deliver the wheat to Turkey. When the vessel arrived at the destination port, it was rejected due to contamination of some sort, which is the standard used to cover political considerations. Since Turkey did not specify the specific phytosanitary problem. The owner of the wheat was informed Egypt, the world’s largest importer of wheat, would take a look at it. Yesterday, the vessel arrived in Egyptian waters, but Egypt refused to even let the vessel enter an Egyptian port. It is beginning to look like the world is punishing India for buying Russian crude oil while the politicians continue to whine about the millions of people who will starve this year due to a lack of wheat.
At least 647 Norwegian oil workers plan to strike on June 12 if state-brokered wage mediation fails, putting some crude output at risk of shutdown although natural gas will not be affected.
Oman is located on the southeastern coast of the Arabian Peninsula. Yesterday, it announced new oil discoveries will raise its production by 50,000 to 100,000 barrels per day for two to three years.
World crude oil refinery capacity continues to shrink. That should mean crude oil prices will be weak as refineries turn away crude because the ability to refine it just is not available. However, the higher diesel goes, the higher crude oil goes.
Brazil will run out of diesel in September if imports are not increased. September is when their planting season begins.
What About Diesel Price Outlook in USA?
Our expectation is that diesel and gasoline prices, at the best, will not decline by any significant amount (more than 30 cents a gallon) until September, if then. At the worst, diesel and gas could easily and probably will go up another dollar, maybe $2 in the coming weeks because the government wants diesel and gasoline prices to do that and oil companies want that. The public is being told it is simply inflation and we just have to roll with the punches, which of course, there is a lot more to high priced fuel than inflation at the current 8 to 10% annual rate while fuel prices have tripled in the past 16 months. There are dozens of executive orders that have been enacted since January 20, 2021 that have hindered production of fuels. Unfortunately, those executive orders will not be reversed until (remotely) possibly after the November elections.