Diesel prices, refining margins soar after US sanctions on Russia
Date
1/18/2025 3:34:59 AM
(MENAFN) Global diesel prices and refining margins have surged after the latest round of US sanctions targeting Russia’s oil trade, driven by expectations of reduced diesel and crude supply, according to analysts and data from the London Stock Exchange (LSEG).
Last week, the US, in coordination with the UK, imposed a broad set of sanctions on Russia, focusing on major oil producers gazprom Neft and Surgutneftegaz, along with more than 180 vessels allegedly involved in bypassing Western oil restrictions—referred to by the US as a ‘shadow fleet’.
Following the sanctions, Western Europe's benchmark diesel contract hit a ten-month high, according to LSEG. The futures market now shows signs of tight supplies, with front-month contracts priced higher than longer-term deals.
Diesel refining margins reached their highest level in over five months, reaching USD20 per barrel on Thursday. Natalia Losada, an analyst at Energy Aspects, told Reuters that the sanctions are expected to disrupt Russian diesel exports significantly. She highlighted that up to 150,000 barrels per day of diesel exports from the affected Gazprom Neft and Surgutneftegaz refineries are at risk.
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