Middle East shakes up Russian dominance of European diesel market

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Europe’s drive to become dependent on Russian energy is progressing as the continent increasingly turns to rival suppliers in the Middle East for its diesel fuel supply.

According to data from Vortexa Ltd, the share of Middle Eastern diesel and gas oil is set to rise to 31% of total imports this month, from an average of 19% in the previous 12 months. Loads of Russian origin will drop to just 39% from an average of 51%.

European Union states are trying to diversify their energy sources ahead of the bloc’s planned February ban on Russian fuel imports by sea, part of a sanctions package punishing Moscow for its invasion of Ukraine. Increased natural gas prices, fueled by the deadlock, have led some companies to switch to oil products, further reducing fuel supplies.

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Europe will have to “gain imports from the Middle East as it faces cuts in Russian diesel flow beginning early next year” if EU sanctions go into effect, said Jonathan Leitch, an oil analyst at Turner. mason & co.

Arrivals from the Middle East to the continent in September are estimated at about 509,000 barrels per day – the highest since at least the beginning of 2019 – according to tanker tracking and Vortexa data collected by Bloomberg.

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The strong transports in the Middle East help Europe counter the impact of declining Russian flows, with the continent urgently needing to build a supply buffer. According to Leitch, the refinery’s maintenance in the fall is already limiting diesel supplies in Europe. Seasonal operations in the US and India have also curtailed exports to the continent, further increasing the demand for supplies in the Middle East.

Read more: Asian diesel flows to Europe heading for a 2-year high

Meanwhile, stocks of diesel and gas oil in independent storage in the Amsterdam-Rotterdam-Antwerp European hub are languishing at their lowest seasonal level since at least 2008, according to data from Insights Global.

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Some European refineries may face adverse economic conditions as they struggle to secure cheap supplies to replace imports of Russia’s flagship crude oil from the Urals, and struggle with high prices for the natural gas they use in processing. said Leitch.

Conversely, refineries in the Middle East are sitting on ample supplies of local crude oil and cheap refinery fuel,” he said.

Diesel squeezes looms as world seeks relief from pricey gas

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