We started to experience supply chain issues earlier in the pandemic related to shortages in semi-conductors and consumer packaged goods. Those persist, but now Europe is really starting to feel the pinch on shortages of energy and subsequently are paying for it.
Brent crude oil prices have more than doubled since October 2020, rising from $42/barrel to over $85/barrel as of today. Despite the whole world being impacted by higher prices, the United Kingdom (U.K.) is particularly being hindered. One factor is the driver shortage much like we are experiencing here in America, only more severe. Britain’s withdrawal from the European Union has made labor shortages worse and the competitive wages for drivers don’t make things any better. When Britain left the European Union, 20% of the truck drivers left the workforce which created a shortfall of roughly 100,000 drivers. As a result, petrol stations across Britain have run out of fuel.
Not only are petrol stations running out of fuel, but U.K. consumers who are getting fuel are paying the highest prices for it in almost a decade. The situation is being compounded by the fact that European natural gas prices have risen 600% this year due to low global inventories. Since the U.K. imports most of its natural gas, the fear of a natural gas shortage is causing energy providers to stock up on diesel fuel at power plants as a backup to provide electricity in the winter. As a result, that is augmenting the price of diesel fuel. This also reduces truck capacity since these plants normally don’t take much diesel fuel and subsequently throw off the ratable delivery schedules of truck drivers. Even if Europe experiences an average temperature winter, it and particularly the U.K. need to be prepared for electricity interruptions and fuel shortages to persist. Winter is coming.