The European diesel fuel market has faced an unusual situation: the main source of pressure is not so much the cost of crude oil, but the shortage of finished fuel. According to Goldman Sachs, global oil refining in July was approximately 6.5 million barrels per day lower than a year earlier, and global diesel exports decreased by about 35%.
The reasons are related to disruptions in the operation of oil refineries and a decrease in refining volumes in certain regions. Additional pressure is created by the reduction of Russian diesel fuel supplies: Russia remains one of the largest exporters of this product, so changes in its exports quickly affect the global market.
For Europe, the problem is particularly sensitive. The region depends on diesel imports, and the shortage has to be compensated by longer supply routes. At the same time, European refineries face high fuel production costs.
An additional risk factor remains the situation around the Strait of Hormuz – one of the key routes for energy supplies. On August 6, Reuters reported on a project being considered in Iran that provides for restrictions for ships of certain countries and penalties for violating the rules. However, the document is still under consideration and is not yet a final decision.
For European motorists, the main conclusion is simpler: even if the oil supply situation normalizes, the problem of diesel refining may persist. Therefore, the cost of fuel at gas stations will now depend not only on the price per barrel, but also on how much finished diesel fuel refineries are able to produce and supply to the market.