The prices of the diesel are all set to fly to levels last seen before the pandemic, even as cargoes from top-supplier Russia subside.
Shipments of diesel type fuels to the mainland are predicted to jump to 1.45 million barrels a day this month; this is the highest rise since August 2019, as per the Bloomberg calculations using data from energy analytics firm Vortexa Ltd.
Streams from Russia will account for 43% of the April total — shrinking to the lowest since December — compared with an average of 56% for all of last year.
Following President Vladimir Putin’s invasion of Ukraine, Europe is racing to diversify its energy supply, and many oil corporations are avoiding Russian cargoes as a result of a growing list of trade restrictions. Shipments from other parts of the globe are now more than making up for the loss of Russian fuel.
“This increase in flows reflects European purchasers wanting to reduce their exposure to or self-sanction Russian diesel,” said Jay Maroo, senior market analyst at Vortexa. “In April, non-Russian fuel imports into Europe nearly doubled month over month.”
Cargoes that belong o the Middle East are expected to double every month and reach the highest level since October 2020. Imports from India are also set to hit a six-month high. Diesel exports from the US have also jumped, pushing arrivals in Europe to the highest in nine months.
Europe’s diesel crack — the distinction between the fuel price versus crude oil — surged to record levels after the start of the war in Ukraine. A busy refinery maintenance period has also contributed to Europe’s market tightness.
According to Jonathan Leitch, an oil analyst at Turner, Mason & Co. ” Europe is one of the regions where diesel cracks have been the highest, to pull in cargoes from other regions.”
Furthermore, he added that “These cargoes are needed to meet strong demand currently and to make up for expected shortfalls in Russian diesel imports.”
Europe stays laboriously reliant on Russian diesel, and supplies of any origin are still allowed to be traded on the continent, even as international sanctions mount on Moscow.