Diesel futures prices dropped by 1.6% even during the EU cut off its biggest supplier, Russia. The price fall represents 20% loss over the past weeks due to the demand of the region. Countries’ efforts on stockpiling ahead of the ban is also one of the reasons. It’s a relief for the continent’s truckers and drivers relying a lot on diesel. Based on the European Automobile Manufacturers’ Association, 96% trucks, 91% vans and 42% passenger cars rely on the fuel. Mark Williams a researcher from Wood Mackenzie said although diesel supply tightens after the ban came in, it is currently not materializing.
Apparently, the ban came after the embargo on seaborne crude oil imports from Russia. It was two months after a package of sanctions against Moscow for the Ukraine invasion. Rystad Energy presents that Russia accounted for 29% of the continent’s total imports. Thus recently, countries prepared for the latest ban on imports of Moscow’s diesel. Vortexa, the energy data provider, said that Europe imports alone were above 19% in the fourth quarter of 2022. Williams added that those stocks are better be a buffer to battle immediate loss of Russian diesel imports.
An oil analytics firm, OilX, points out that the demand was low in Europe compared to a year before. Analysts however use the warm weather in the region for the low demand on diesel. Because it is used to heat fuel. However, although the demand fell, the wholesale prices are above 10%. In fact, the average cost of a diesel per liter in the EU has reached €1.80.