Volatile oil prices are hurting every corner of the global economy, but experts warn that it's nothing compared to the looming diesel shortage.

Since Russian President Vladimir Putin’s invasion of Ukraine at the end of February, global energy markets have spun into endlessly volatile territory as Western nations imposed sanctions on Russia and private oil and gas companies backed out of the country.

Europe has been hardest hit by the disrupted trade flows with Russia, which was the continent’s largest provider of fuel. Now it might be facing an unprecedented diesel shortage, the CEOs of three leading commodity trading companies said on March 22 at the Financial Times’ annual Commodities Global Summit in Switzerland.

“Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East,” Russell Hardy, CEO of energy trading company Vitol Group, said at the conference. “That systemic shortfall of diesel is there.”

Executives warned that extreme conditions caused by that shortage could lead to dwindling supply for the rest of the year, requiring fuel rationing from EU governments.

“The diesel market is extremely tight. It’s going to get tighter,” Jeremy Weir, CEO of commodity trading house Trafigura, said at the summit.

Torbjörn Törnqvist, CEO of commodity conglomerate Gunvor Group, also predicted that Europe’s energy supplies could remain low until next year, calling the energy market “paralyzed” at the moment.

“This is a global problem, but for Europe it’s very hard because Europe is so short,” Törnqvist said.

Europe imports roughly two-thirds of all its external crude oil, which is refined to make diesel, from Russia. And the conflict in Ukraine has exposed Europe’s extreme reliance on Russian fuel.

Europe will feel the sting of a diesel shortage, but measures to conserve fuel are being advised everywhere, including the U.S., as oil and gas reserves reach dangerously low levels. On March 25, the International Energy Agency, a global energy watchdog, prescribed a set of strategies to cope with oil and gas shortages reminiscent of the steps taken during the 1970s oil crisis, including car-free Sundays and reduced speed limits on highways.

In the U.S., diesel fuel is mainly used for farm and construction equipment, but in Europe, many normal road cars use diesel. In 2019, 42% of vehicles in Europe utilized diesel fuel. In some countries, such as Spain, Ireland, France, and Austria, that number was even higher, according to the European Automobile Manufacturers Association, and well over half of all cars required diesel.

Europe imports around 1 million barrels a day of Russian diesel, according to Amrita Sen, chief oil analyst at research and consultancy firm Energy Aspects, who also spoke at the summit, the Financial Times reported. Sen called diesel “by far the worst affected” of oil products for European markets.

Diesel prices in Europe had already been projected to rise for some time due to new EU regulations and taxes on carbon emissions, but the Ukraine invasion and supply shortage has already sent them soaring to record highs in the U.K. and the EU.

Amid the shortage, the EU is now hunting for new sources of diesel to weather the storm. Europe is coordinating to increase diesel trade flows with Middle Eastern and Asian nations, and in a reversal of normal trade directions, two U.S. fuel tankers recently left port in New York carrying 700,000 barrels of diesel to Europe.