The European Union has stated that a new package of measures aimed at restricting supplies of fuel from Russian oil will not come into force until January, which has allayed some fears that they might narrow the already tight diesel market, writes UNN with reference to Bloomberg.
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In legal documents published over the weekend, the EU stated that the ban would come into effect on January 21 next year. "This was preceded by a statement made on Friday that the group would continue to implement a ban on the import of oil products, primarily diesel fuel, produced in third countries using Russian oil," the publication notes.
This measure, as indicated, effectively bans one of the main bypass routes for sanctions on Russian supplies. Since the restrictions came into force, large buyers of Moscow's fuel, such as India, have been able to process oil purchased at a low price in Russia and then sell the fuel to Europe, the publication notes.
The premium of diesel futures to crude oil fell on Monday after this statement.
"The EU has given diesel markets a breather by publishing a last-minute six-month transition period for imports of Russian oil products from third countries," said Rabobank analyst Florence Schmitt.
The delay in entry into force means that an additional restriction on diesel supply will occur at a time when an oversupply in crude oil markets is expected, potentially limiting the consequences, she added.