London
CNN
—
Europe Russian diesel ban come easily on Sunday.
Although the EU has cut off its biggest supplier, diesel futures in the bloc fell 1.6 per cent on Monday, a 20 per cent drop over the past two weeks on weak demand in the region. and countries trying to stock up ahead of the ban. has begun to pay off.
The discount will be met with aided by millions of people continental truck driver, motorists and businesses using diesel engines. About 96% of trucks, 91% of vans and 42% of passenger cars in the European Union run on fuel, according to European car manufacturers’ Combination.
Mark Williams, research director at the consulting firm, said: “It was expected that, when the ban went into effect, the supply of diesel into Europe would tighten, but in reality, that is not currently the case. realistic. Wood Mackenzie, told CNN.
The ban on diesel engines came two months after the block placed the embargo import crude oil by sea from Russia, as part of a package of sanctions against Moscow for its invasion of Ukraine. Data from Rystad Energy shows that Russia accounted for 29% of the region’s total diesel imports last year.
Countries are preparing for the latest ban by increasing Moscow’s diesel imports in recent months. According to energy data provider Vortexa, European imports grew by almost 19% in the fourth quarter of 2022 year-on-year.
Those stockpiles will act as a cushion against an immediate loss in Russian diesel imports, Williams said.
Demand across the bloc is also weak.
Data from OilX, an oil analysis company, shows that diesel demand in Europe has fallen from the beginning of November to the end of January compared with the same period a year ago.
Analysts attribute the drop in part to The weather is warmer than usual in the region, where diesel is also used as a heating fuel and the price is high. Despite the recent drop, wholesale prices are still 10% higher than in the same period last year.
At the pump, the average cost of a liter of diesel in the EU reached €1.80 ($1.93) on January 30, up from €1.60 ($1.72) the same time last year. Last year, data from the European Commission showed.
Neil Crosby, a senior analyst at OilX, told CNN that “persistently weak demand data” in Europe has helped it to “significantly increase oil and gas reserves over the past few months”.
However, it may take several months for the full impact of the ban to be felt as Europe begins to import more. diesel oil from more distant supplierincur higher shipping costs.
block According to Williams at Wood Mackenzie, the company imported significantly higher volumes of diesel from the United States, the Middle East and parts of Asia.
Even so, that amount of oil imports won’t be enough to “make up for the loss of Russian oil to Europe,” once Europe cuts its stockpiles, he said, adding that prices relative to importing regions Others may start to increase from the third quarter of this year.
The impact of the ban on Russia is also likely to be negligible.
Moscow has managed to redirect more diesel to other markets since July last year. According to Rystad Energy, exports to Turkey and North Africa increased 154% in the November-January period compared to the same period a year earlier.
Jorge León, the company’s senior vice president, sees this trend continuing, he told CNN, predicting that Russian exports to South America will likely remain at “margins”.
However, he added that the US could redirect some of its current exports of diesel engines from South America to Europe, with Russian diesels then “finding[ing] a house” in South America.
OilX’s Crosby notes that there are “more” potential buyers of Moscow’s diesel than the country’s crude exports.
“Most of the barrels of Russian diesel will manage to make it to the global market,” he said. “The idea that Russian diesel engines will have difficulty sourcing new sources is starting to lose credibility.”
— Julia Horowitz contributed reporting.
Correction: A previous version of this article inaccurately reported the measurement of reduced diesel in Europe. Diesel demand has fallen.
