Tight EU Diesel Supplies Driving Higher Asian Flows

Diesel flows from Asia to Europe are set to jump to a four-month high in March. Europe is seeking replacement supplies following Russia sanctions in early Feb and with French strikes disrupting European supplies since early March.

• Exports of diesel and gasoil-type fuels from Asia are forecast to increase 91% from last month to reach 1.3m tons in March if the shipments are fulfilled according to preliminary data by Kpler. Approximately 700k tons have already been loaded on the route.
• India is set to be the largest supplier at 1.15m tons.

• The increase adds to flows from the US New York Harbour area which is sending the first substantial US export to Europe since March 2022.

• The flows are incentivised by the increased premium for gasoil in Europe over Asia. Near term European Gasoil time spreads are trading near the highest since November with Apr-May reaching 35$/mt on 20 March.
  • Gasoil APR 23 up 1.2% at 779.75$/mt
  • Gasoil APR 23-MAY 23 up 3.25$/mt at 31.75$/mt
  • Gasoil JUN 23-DEC 23 up 1.75$/mt at 23.75$/mt
  • Gasoil DEC 23-DEC 24 up 1.25$/mt at 20$/mt