Diesel Steadies As Market Considers Impact of Russia Export Ban

Diesel markets have steadied after the initial surge higher yesterday on the reports of the ban on Russian diesel and gasoline exports.

• The European Gasoil-Brent spread is today holding steady at 34.5$/bbl but below the peak of just over 37$/bbl yesterday. The risk of tight global supplies has helped maintain the strong curve backwardation with the Gasoil prompt spread up at 33$/mt and Dec23-Dec24 at 114$/mt.
• Although no time line for the temporary ban has been set, many analysts expect it to be short lived and flows are likely to only gradually decline as fuel cargoes already accepted for shipment can still be exported.
• “Despite this being only a temporary ban, the impact is significant as Russia remains a key diesel exporter to global markets,” said Alan Gelder at Wood Mackenzie. “The global refining system will struggle to replace those lost Russian volumes at a time when global diesel inventories are already at low levels.”
• Data this week showed US distillate stocks still at 15.1% below the five year average, European ARA Gasoil stocks are 22.5% below and Singapore Middle Distillates inventories are up to 20.3% below average.
  • Gasoil OCT 23 down -2.1% at 985.75$/mt
  • ULSD OCT 23 up 0.3% at 3.38$/gal
  • Gasoil OCT 23-NOV 23 down -2.25$/mt at 33$/mt
  • Gasoil DEC 23-DEC 24 down -9.75$/mt at 114.25$/mt
  • EU Gasoil-Brent down 0$/bbl at 34.45$/bbl
  • US ULSD crack up 0$/bbl at 48.65$/bbl