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The crisis with Russia showed the world that Europe had forgotten the refining business to depend on ‘cheap’ fuels of Russian origin. what happened to the diesel is a clear reflection of it. Europe moves by buying a quarter of the diesel it consumes Russiawhich has meant that this year filling a diesel tank far exceeds filling a similar tank of gasoline 95. A gap that has been closed at the start of 2023, although not for long.
The latest data offered by the European Commission Oil Bulletin of last February 6 reflects a price per liter of diesel at 1.68 euros compared to 1.66 for gasoline 95. Two cents that are far from the 20 cents that differentiated them in the month of November. From the Spanish oil sector they point out that The reduction in the difference has come about thanks to good refining activity, a drop in demand and the fact that the different countries have done a good job of storage to deal with the lack of Russian supply.
According to the data provided S&P Global CommoditiesRussian diesel now represents 27% of the total 1.69 million barrels a day of imports from Europe in the period. Although still high, Europe’s dependence on Russian diesel has nearly halved from pre-war levels, when the region sourced 46% of its diesel imports from Russia.
The problem comes now. The European Union’s ban on importing refined products from Russia came into force this week, specifically on February 5. Europe faces the great challenge of obtaining alternative diesel. Spain It is one of the countries that can best weather the situation, since it has increased its refining capacity by 16% since 2009 after an investment of 7,000 million companies in this industry.
From the market they expect companies like Repsol, with five refineries in Spain, can benefit from this situation. “Repsol is oriented towards diesel, so we expect it to take advantage of the new market disruptions”, explain the analysts from Bestinver Securities. But Spain will not be able to get rid of the stress of the international market, mainly diesel.
United States offers diesel
The search for alternatives to Russia has benefited other providers. Since the Russian invasion of Ukraine, US refineries have become the largest source of alternative diesel in Europe, as shown by the oil data reported by S&P. Diesel shipments originating in the United States have reached record figures of 237,000 barrels per day in the first half of January, compared to 34,000 barrels at the beginning of 2022.
Saudi Arabia and the United Arab Emirates They have also come to the rescue of Europe to collaborate with the lack of supply. The diesel flows from china and malaysia rose sharply from December levels to a combined 77,000 barrels a day, while India’s diesel exports to Europe were 105,000 barrels down from 230,000 last month.
India is one of the alternative suppliers of petroleum derivatives to Europe that have increased the purchase of Russian oil. Because Russia has also had to find new partners after the loss of markets from the European Union and the G7.
Crédito y Caución estimates a 12% drop in Russian production in 2023. “Cutting exports is risky for Russia. Prices would rise temporarily, but since the war in Ukraine is unlikely to end anytime soon, we expect world markets to rebalance at the expense of Russia’s share of world production. It could also lose influence in OPEC,” explains Atradius economist Dana Bodnar.
Some uncertainties that experts await to see the evolution in the coming months to see if the estimates are met. At the moment, without purchases of Russian diesel and as long as alternative suppliers cannot complete all the supplies that are dispensed with, diesel is delivered to a drop in consumption and to the duration of storage so as not to open a gap with gasoline again.
