- The EU and the UK continued to be the largest importers of Russian diesel in November, with nearly half of seaborne diesel coming from Russia.
- With the embargo on Russian petroleum products coming into effect on February 5th, flows to the EU and the UK are rising.
- As of February 5th, Europe will have to compete with non-Russian diesel buyers for U.S., Indian, and Middle Eastern exports.
Europe continues to be the biggest buyer of Russian diesel, with nearly half of EU and UK seaborne diesel imports having come from Russia this month, according to data from Vortexa compiled by Bloomberg.
The EU and the UK imported an average of 1.34 million barrels per day (bpd) of diesel-type fuel between November 1 and 24, of which 45%—or 600,000 bpd—came from Russia, Vortexa’s data showed.
The still high dependence on Russian diesel could become a big problem for Europe in just two months, when the EU embargo on imports of Russian oil products by sea enters into force on February 5.
Russia is still the biggest supplier of diesel to Europe, which will have to replace more than 500,000 barrels per day (bpd) of diesel supply after February, the International Energy Agency (IEA) says.
“While a flood of East of Suez diesel imports has improved Europe’s positioning for the upcoming winter, Russia-Europe flows are rising again ahead of the 5 Feb EU import ban,” David Wech, Chief Economist at Vortexa, wrote in an article earlier this month.
It is even more challenging to make calls about what will happen with Russian diesel after the EU embargo than with what will happen with Russian crude oil, the ban on which begins on December 5, according to Vortexa.
Per the IEA estimates in its Oil Market Report for November, EU countries had reduced Russian diesel imports by 50,000 bpd to 560,000 bpd by October.
“When the crude and product embargoes come into full force in December and February, respectively, an additional 1.1 mb/d of crude and 1 mb/d of diesel, naphtha and fuel oil will have to be replaced,” the IEA said in the report.
As the EU embargo on imports of Russian diesel enters into force, “The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East and India away from their traditional buyers,” the agency said.