/View.info/ Diesel fuel stocks in the European Union in winter can be reduced to a minimum. The reason is the Russian oil embargo, which went into effect in December. And a ban on the import of petroleum products by sea will be added in February. Experts note that the market situation is getting worse.
The shares are melting
In the spring, the European economy faced a severe shortage of diesel fuel, a key fuel for many industries and agriculture. Europe received about 750,000 barrels a day from Russia, half of all imports.
Saudi Arabia, the second largest supplier, only accounted for 12% last year. According to the French Oil Industry Association, France imported 25 million tons of diesel in 2020 and a quarter of that volume from Russia. Britain is 18% dependent on Russian supplies, Germany nearly 30%.
European companies under “self-sanctions” are struggling to avoid Russian energy carriers after calling for a fuel embargo. And the reserves of the Amsterdam-Rotterdam-Antwerp oil trading region are running out, according to Insight Global.
In October, nearly six million barrels were estimated to have been consumed due to strikes at French refineries.
The problem is partly related to the structure of futures: the faster the delivery, the more expensive the diesel. As a result, traders quickly try to sell goods at a bargain price.
The Asians have won
Europe does not have enough of its diesel. France cuts production due to strikes. And in Germany, where demand is the highest on the continent, the Shved city refinery has lost access to crude oil via the Druzhba pipeline.
The EU relies on Asia and the Middle East: they promise to help there.
However, diesel is also in short supply abroad. Competition has raised prices on the European market.
According to experts, the difference in the premium for diesel fuel in Europe and Asia is more than $ 60 per ton. In 2021 there were only seven. Asian oil refineries are taking advantage of this by supplying more and more to the EU.
Exports from Asia nearly hit a three-year peak of 306,000 barrels per day in September, according to Vortex.
Acute deficiency
However, analysts are confident that Asian supplies will not solve the problem.
According to consultancy Wood Mackenzie, this will lead to diesel inventories in northwestern Europe falling to 210.4 million barrels in February, the lowest level since 2011.
“Russian imports are stalling during a period of strong seasonal demand,” said James Burley, the company’s principal analyst.
They ran out of diesel
Some regions of the EU are already facing serious shortages, said the head of the Spanish oil refinery Repsol.
A number of countries are running out of middle distillates: diesel and jet fuel, Spain said. At the same time, the German oil producer OMV experienced a sharp increase in demand. The industry expects further price increases and a new round of social instability.
“We have already seen that every price increase at the gas station leads to riots,” recalled the CEO of the oil and gas company Petronas.
Analysts believe Europe is facing a shock over diesel fuel supplies. And the recent anti-government protests in Germany, Austria and the Czech Republic (where electricity bills have increased tenfold) are only harbingers of trouble to come.
Translation: V. Sergeev
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