As oil hits US$120 today on growing fears that rising demand will overpower tight supplies, another problem looms on the horizon for consumers of fossil fuels, economists warn.
Global refinery capacity is being stretched to its limit, raising the price of petroleum products like gasoline and diesel even more than the soaring cost of oil, says Capital Economics.
The reason: Russia is the world’s second largest net exporter of both crude oil and petroleum products. But while crude oil exports have been little affected by the war in Ukraine, its export of petroleum products, which are mostly shipped by sea, has halved.
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