Diesel Prices Fall In Europe Despite A Ban On Russian Fuel  

 

• Europe’s ban on Russia’s diesel arrived painlessly on Sunday. Although the EU cut off its biggest supplier, diesel futures prices in the bloc fell 1.6% on Monday, amounting to a 20% loss over the past two weeks as demand in the region has waned, and efforts by countries to stockpile ahead of the ban have started to pay off.
• “The expectation was that, when the ban came in, diesel supply into Europe would tighten but, actually, that’s currently not materializing,” Mark Williams, a research director at consultancy Wood Mackenzie, told CNN.
• The diesel ban comes two months after the bloc placed an embargo on seaborne crude oil imports from Russia, as part of a package of sanctions against Moscow for its invasion of Ukraine. Russia accounted for 29% of the region’s total diesel imports last year, data from Rystad Energy shows.
• It may take a few months for the full impact of the ban to be felt as Europe starts to import more diesel from suppliers further afield, incurring higher shipping costs. The bloc is already importing significantly higher volumes of diesel from the United States, the Middle East and parts of Asia, according to Williams at Wood Mackenzie.
• Even so, those imports will not be enough to “offset the loss of Russian barrels into Europe,” once Europe whittles down its stockpile, he said, adding that prices relative to other importing regions could start to rise from the third quarter this year.

(Source: CNN)