Diesel prices in Europe are soaring due to sanctions and refinery disruptions – Bloomberg
Kyiv • UNN
The European diesel fuel market is experiencing price increases due to US sanctions against Russian oil companies and refinery disruptions. The premium of diesel futures compared to Brent crude oil contracts has reached a 20-month high.
The European diesel fuel market is experiencing a sharp rise in prices amid a double blow – new sanctions against Russian oil companies and disruptions at oil refineries. This is reported by Bloomberg, writes UNN.
Details
The premium of diesel futures in Europe compared to Brent oil contracts, known as the crack, reached a more than 20-month high this week. The market pressure was influenced by US sanctions against Rosneft and Lukoil, Ukrainian attacks on Russian energy infrastructure, and disruptions at Kuwait's 615,000 bpd Al-Zour refinery.
US sanctions on Lukoil and Rosneft mean that buyers of Russian diesel may have to turn to alternative barrels until a workaround is found.
The EU already banned imports of Russian diesel in 2023, but any disruptions to exports due to sanctions risk spilling over into the global market and being felt in Europe, where there is a structural deficit of this fuel. At the same time, demand for heating diesel is growing due to the approaching winter.
The forward diesel curve also shows signs of market tension: the premium of the monthly contract has increased compared to the next, signaling a reduction in supply compared to demand.