Tech • AI • Robotics • Game
The world will run out of DIESEL! (Close-up on the mystery of too-low oil…)
4/10TL;DR
The energy market is experiencing an unprecedented disconnect between crude oil and diesel, revealing a deeper transformation of the global economy.
KEY POINTS
A record gap between oil and diesel
The price spread between Brent and diesel has reached historically high levels, with a gap of around $40. While crude oil remains moderate, diesel—essential for transport and industry—is trading with availability premiums on certain cargoes, particularly between the Middle East and India.
Real supply pressures
Several signals point to pressure on diesel: delivery premiums, localized shortages, and industrial disruptions. In Russia, a refinery accounting for 8% of national refining capacity was hit, heightening concerns about global supply.
Oil considered artificially low
Despite geopolitical tensions and low inventories, the barrel remains contained around $70–75. Adjusted for inflation and compared to 2008 levels, it appears undervalued, even as global demand remains strong.
Markets shaped by strategic interests
Major players have no interest in a price spike. Governments, notably the United States, hold reduced reserves after years of drawdowns, encouraging efforts to keep prices contained despite real supply tensions.
Shift toward a less oil-dependent economy
Markets are anticipating a transition to a model dominated by digital infrastructure, data centers, and artificial intelligence. These systems primarily consume natural gas and electricity, reducing direct dependence on oil.
Surge in investment in digital energy
Companies tied to data center energy infrastructure have seen valuations jump, sometimes multiplying by 2 to 4 in just a few months. This reflects a massive reallocation of capital toward data-processing technologies.
Diminishing impact of announcements on markets
Prices still react to political statements, such as those by Donald Trump, capable of moving oil by 6% within hours. However, the growing volume of voices and information sources is gradually reducing the impact of such announcements.
Markets increasingly driven by information flows
Algorithms and reactions to news now dominate price movements. Financial media releases or decisions by major actors like the Bill Gates Foundation can instantly influence prices, increasing volatility.
A paradox between physical reality and market prices
As with gold, where demand remains strong despite price swings, oil and diesel illustrate a growing disconnect between physical fundamentals and valuation. Shortages no longer automatically trigger price increases.
CONCLUSION
The energy market is entering a phase where prices no longer reflect only supply and demand, but also expectations of a shift toward a digital economy powered by natural gas.
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