President Joe Biden ended Russian oil, diesel and other energy imports into the United States
While announcing the latest sanctions, Biden acknowledged the ripple effects it would have on the United States, saying, “This is a step that we’re taking to inflict further pain on Putin, but there will be cost as well here in the United States.”
The United States is already feeling the pain. Diesel was up 74.5 cents per gallon for the week ended March 7 compared to the previous week, according to the Energy Information Administration. On Monday, that price was $4.849 per gallon, up 54% from the comparable week in 2021.
For the nation’s truck fleets, it has been the worst pain at the pumps since July 2008, when oil hit the $150 per barrel mark. That was when diesel hit its long-held record pump price of $4.8448, according to Kloza.
The higher pump prices will likely cause fleets to scramble to make sure any empty miles are filled with freight on the backhaul, and a new emphasis on aerodynamic tools, such as wheel covers, could be in the future. Fuel prices usually rise as weather in North America gets warmer, so prices are likely not done with the roller-coaster yet.
But consumer reaction could dramatically change everything. Experts have been wondering when “demand destruction” for gasoline and diesel could arrive when prices are so high. High fuel prices also mean consumers start buying less, affecting the need for freight hauling.
Dan Pickering, chief investment officer of Pickering Energy Partners, tweeted that he thinks such demand dips are currently in play.
“Demand destruction is happening now in my opinion,” Pickering said.
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Source: Supply Chain Dive
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