Connect with us

Hi, what are you looking for?


Europe set for diesel supply scramble as tight marketshare exposed

Europe could be scrambling for diesel supplies over the winter, with the continent increasingly exposed to “exceptionally tight markets,” warned the International Energy Agency (IEA).

The Paris-based climate group revealed diesel prices surged to record highs last month, 70 per cent higher than this time last year, dwarfing even the historic gains in crude oil.

Diesel is currently priced 425 per cent higher than Brent Crude, which rose 11 per cent over the same 12-month period and has been subjected to OPEC measures to tame prices.

This was creating further tensions in the economy, and reflected both resilient demand and concerns over supply shortages.

“High diesel prices are fuelling inflation, adding pressure on the global economy and world oil demand,” said the IEA.

It predicts that when an EU embargo on imports of diesel and other refined products from Russia is implemented in February, the European market will tighten further.

This is because the competition for non-Russian diesel barrels will be fierce, with EU countries having to bid supplies from the US, Middle East and India away from their traditional buyers.

The IEA said: “Increased refinery capacity will eventually help ease diesel tensions. However, until then, if prices go too high, further demand destruction may be inevitable for the market imbalances to clear.”

By October, EU countries had reduced Russian crude oil imports by 1.1 m barrels per day (mb/d) to 1.4 mb/d, and diesel flows by 50 kb/d to 560 kb/d.

When the crude and product embargoes come into full force in December and February, respectively, the IEA expects an additional 1.1 mb/d of crude and 1 mb/d of diesel, naphtha and fuel oil will have to be replaced.

Diesel prices have been rising upwards for much of the year.

The IEA highlighted that the fuel is not only a staple of economic activity, and that supplies have dwindled amid French refinery strikes last month and upcoming embargoes propelling diesel prices in Rotterdam, Europe’s main trading hub.

Lower Chinese product exports also tightened the market, with the country’s economy rattled by its exhaustive zero-Covid approach to the pandemic.

Europe has already been grappling with the possibility of gas shortages, racing to top up storage levels to 95.6 per cent of capacity ahead of winter – with multiple EU nations engaged in rationing measures.

Meanwhile, National Grid in its winter outlook has warned of blackouts as a worst-case scenario in the UK this winter.

Read more:
Europe set for diesel supply scramble as tight marketshare exposed

You May Also Like


The head of the International Monetary Fund has warned of increased risks to the stability of the financial system after weeks of banking sector...


After taking a breather in the week before this one, the Indian equity markets resumed their up move. The headline index continued with its...


It was supposed to be a debacle. As the Second World War drew to a close, the nation’s leading economists feared that, once the...


Small businesses are bringing forward their finance applications in order to beat expected further interest rate rises, according to new research. Four-in-ten (44%) SME...

Dislaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2023 | All Rights Reserved