This is an Investing Ideas breaking news market update on the ongoing British fuel crisis.
What’s Going On?
Event: Gas Stations in Britain are running dry.
Reasons: Panic Buying, Truck Driver Shortages.
Millions of Britons are flocking to gas stations in order to fill their tanks. The situation has taken on aspects of hysteria, in the past week. Panic buying is rampant.
Cause
We are experiencing some fuel supply issues at some of our retail sites in the UK….
BP Statement
This statement issued by BP on Sept. 24 is the flame which ignited into the current situation. As mentioned previously, panic buying did most of the legwork to make the situation so bad.
The reasons for the truck driver shortages in Britain can be seen below. Note that this is an opinion survey.
Price Impact (For UK Drivers)
Road fuel prices are at an eight year high in Britain. Given the apparent increase in demand, it is surprising that the price has not leapt even higher.
Impact on Global Oil Prices?
Oil prices have staged a massive rally since historic lows back in 2020. The biggest impact that this is likely to have on oil prices is from an optics perspective, not necessarily from a fundamental perspective. That is to say: this situation lends itself well to the narrative of fuel scarcity. Britain, and London especially, plays a massive role in international commodity markets.
In short: The “fuel shortage” may impact investor sentiment and help justify high oil prices. As of yet, the impact of this shortage on global oil prices has been fairly muted.
