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Russian diesel fuel exports last month fell by 14 percent, or 500,000 tons, last month as buyers shunned the product amid Western sanctions on Moscow for its invasion of Ukraine.
“The largest decrease can be seen from the Black Sea ports as self-sanctioning starts to kick in by certain European countries,” Pamela Munger, senior market analyst at Vortexa, told Bloomberg today. “The UK, France and Italy have all reduced imports of Russian diesel.”
Total diesel fuel exports from Russia in April stood at 3.32 million tons, which compared with 3.88 million tons in February, the last month without sanctions.
“Looking forward, we could see a drop in Russian diesel exports as Russia seeks alternative buyers and Europe looks for alternative sources,” Munger added, as more EU sanctions targeting Russia’s energy industry take effect.
The resulting supply reduction will fuel already significant inflation in diesel prices not only in Europe but in the United States as well. The inflation stems from growing supply tightness brought about by a decline in refining capacity during the pandemic coinciding with a faster than expected rebound in demand.
In the United States, diesel prices have been breaking records in the past few weeks, sparking worry for the wider economy as the bulk of freight transport uses diesel as a fuel.
“I’ve started to use the term diesel ‘crisis,’ Tom Kloza, head of global energy research at OPIS, told CNBC in late April. “It clearly is a crisis that’s happening before our eyes. I wouldn’t rule out lines, shortages or $6 [price] in places beyond California. I wouldn’t say it’s a shortage yet. Europe, I think they’re headed for a shortage,” he said.
Diesel prices are breaking records in Europe, too. The Wall Street Journal reported earlier today that wholesale diesel prices have added as much as 88 percent over the past 12 months, and the continent is facing a shortage of the fuel amid the Russia sanctions.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.