Global Diesel Costs Spike Following Recent US Sanctions on Russia - Reuters
Diesel prices have reached their highest level in five and a half months, attributed to concerns about potential supply disruptions. Read Full Article at RT.com
TroibNews 
According to the outlet, prices have reached a five-and-a-half-month peak amid concerns over potential supply disruptions.
Global diesel prices and refining margins have seen significant increases following the latest US sanctions on Russia's oil trade, spurred by traders' expectations of diminished diesel and crude supplies, Reuters reported on Friday, citing analysts and London Stock Exchange data.
Last week, the outgoing US administration coordinated with the UK to impose a “sweeping” round of sanctions on Russia. These measures targeted prominent oil producers Gazprom Neft and Surgutneftegaz, as well as over 180 vessels purportedly involved in transporting Russian oil to bypass Western restrictions, which the US has referred to as a ‘shadow fleet.’
In the week following the sanctions, the benchmark diesel contract in Western Europe surged to a ten-month high, as reported by the outlet, referencing LSEG.
The futures market now suggests tight supplies or a market deficit, indicated by front-month contracts trading at higher prices than those for contracts further in the future.
On Thursday, diesel refining margins reached their highest level in over five months, hitting $20 per barrel.
“Diesel [profit margins] are up following news on the sanctions, and we expect meaningful disruptions to Russian diesel exports,” said Energy Aspects analyst Natalia Losada in her comments to Reuters.
Losada highlighted that approximately 150,000 barrels per day of Russian diesel exports from the affected Gazprom Neft and Surgutneftegas refineries are at risk.
While most of the sanctioned vessels are believed to transport crude and fuel oil, restrictions may impact refinery operations in India and China, potentially decreasing diesel exports to the EU, according to Sparta Commodities analyst James Noel-Beswick, who spoke with the outlet.
European nations heavily rely on diesel for cargo transportation, aviation, and residential heating. A significant price increase could further strain the already faltering economies of the bloc, which had depended on Russian diesel imports before they were prohibited.
Noel-Beswick further noted that Türkiye and Brazil, the leading buyers of Russian diesel, may need to seek alternative sources from the US and Middle East, heightening competition for European buyers.
Debra A Smith contributed to this report for TROIB News
Global diesel prices and refining margins have seen significant increases following the latest US sanctions on Russia's oil trade, spurred by traders' expectations of diminished diesel and crude supplies, Reuters reported on Friday, citing analysts and London Stock Exchange data.
Last week, the outgoing US administration coordinated with the UK to impose a “sweeping” round of sanctions on Russia. These measures targeted prominent oil producers Gazprom Neft and Surgutneftegaz, as well as over 180 vessels purportedly involved in transporting Russian oil to bypass Western restrictions, which the US has referred to as a ‘shadow fleet.’
In the week following the sanctions, the benchmark diesel contract in Western Europe surged to a ten-month high, as reported by the outlet, referencing LSEG.
The futures market now suggests tight supplies or a market deficit, indicated by front-month contracts trading at higher prices than those for contracts further in the future.
On Thursday, diesel refining margins reached their highest level in over five months, hitting $20 per barrel.
“Diesel [profit margins] are up following news on the sanctions, and we expect meaningful disruptions to Russian diesel exports,” said Energy Aspects analyst Natalia Losada in her comments to Reuters.
Losada highlighted that approximately 150,000 barrels per day of Russian diesel exports from the affected Gazprom Neft and Surgutneftegas refineries are at risk.
While most of the sanctioned vessels are believed to transport crude and fuel oil, restrictions may impact refinery operations in India and China, potentially decreasing diesel exports to the EU, according to Sparta Commodities analyst James Noel-Beswick, who spoke with the outlet.
European nations heavily rely on diesel for cargo transportation, aviation, and residential heating. A significant price increase could further strain the already faltering economies of the bloc, which had depended on Russian diesel imports before they were prohibited.
Noel-Beswick further noted that Türkiye and Brazil, the leading buyers of Russian diesel, may need to seek alternative sources from the US and Middle East, heightening competition for European buyers.
Debra A Smith contributed to this report for TROIB News
