Why is it
difficult to find suppliers for DIESEL EN590
and JETFUEL A1
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Finding
suppliers for diesel EN590 is currently
particularly difficult for various reasons.
These reasons are due to global geopolitical
developments as well as economic and regulatory
challenges. Here are the most important
factors:
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1.
Geopolitical tensions and
sanctions
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Sanctions
against Russia:
Until
recently, Russia was one of the largest
suppliers of diesel to Europe. Following
the start of the war in Ukraine and the
subsequent sanctions imposed by the EU and
other Western countries, the import of
Russian products, including EN590 diesel,
has been severely restricted.
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Companies are
now looking for alternative suppliers,
which is increasing demand on the
remaining markets.
Russian
producers are increasingly supplying
Asia, which is further reducing
availability in Europe.
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Regional
instability:
Conflicts and
political instability in oil-rich regions
(e.g. in the Middle East or Africa) have a
negative impact on production and export
capacities.
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2.
Limited production capacities
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Refineries
and raw material
shortages:
Diesel
EN590 must meet strict European standards,
which requires special refinery processes.
Not all refineries worldwide are designed
to produce EN590 quality fuels.
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Global shortages
of raw materials, particularly light
crude oil, which is needed for diesel
production, are making the situation
even more difficult.
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Closure of
refineries:
In
recent years, several refineries have
closed in Europe due to economic pressure,
falling demand (during the COVID-19
pandemic) and strict environmental
regulations. This has reduced overall
production capacity within the EU.
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3.
Logistical challenges
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Transportation
problems:
The
relocation of diesel EN590 procurement from
other regions is leading to increased
pressure on global logistics.
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Bottlenecks in
shipping, port congestion and a lack of
tankers or pipelines hinder timely
delivery.
Higher
transportation costs make deliveries
less economical..
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Regional
infrastructure:
Countries that are
potential new suppliers (e.g. in the Middle
East or Africa) often do not have
sufficient export infrastructure to
reliably serve the European market.
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4. High
demand and competition
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Global
demand for diesel:
Diesel
is not only needed in Europe, but worldwide
for transportation, industry and
agriculture. Demand is growing steadily,
particularly in Asia and the USA.
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As a
result, competition for the available
quantities of EN590 diesel has
increased significantly.
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Diversification
by country:
European
countries are increasingly trying to find
new suppliers, which increases the pressure
on international markets. This search for
alternatives leads to price increases and
scarce availability.
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5.
Strict quality and environmental
regulations
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EN590
standards:
Diesel
EN590 must meet strict requirements for
sulphur content, energy efficiency and
environmental friendliness. Not all
potential suppliers outside Europe are able
to meet these standards..
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Sustainability
requirements:
European
regulations promote the blending of
biofuels with diesel, which places
additional requirements on suppliers.
Companies must ensure that their supply
chains are sustainable and legally
compliant, which limits the choice of
suitable partners.
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6.
Economic uncertainties and financing
problems
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Exchange
rate and financing
risks:
The
purchase of diesel on the international
market is associated with currency risks
and volatile prices.
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Small and
medium-sized companies that need diesel
are often unable to compete with large
market players or make high upfront
payments.
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Inflation
and cost increases:
Rising
energy and production costs are a burden on
both producers and buyers, further reducing
the number of economically viable
suppliers.
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7. Lack
of established trade relations
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Lack of
experience with new
suppliers:
Due to
the exclusion of Russian products, many
European companies have to look for new
suppliers, often in regions with which they
previously had no established trade
relations.
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Building trust
and logistics structures takes
time.
Complexity of global supply
chains:
New suppliers must be integrated into
existing supply chains, which means additional work
for certifications, contracts and
compliance checks
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8.
Short-term market volatility
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Uncertainty
in the demand
forecast:
Fluctuations in
demand due to the energy transition and the
growing share of electromobility make
long-term planning difficult for suppliers
and buyers.
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Political
uncertainties:
Constant
changes in international trade policy and
new sanctions make market developments
unpredictable.
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Conclusion
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The
difficulty in finding suppliers for EN590
diesel is a result of several interwoven
factors, including geopolitical tensions,
market volatility, production restrictions and
strict European standards. Companies face the
challenge of identifying new sources of supply,
diversifying their supply chains while ensuring
the commercial viability of their procurement.
In the long term, a stronger focus on
alternative energies and fuels will be
necessary to reduce dependence on diesel
EN590.
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