Diesel exports have significantly decreased last month, intensifying the energy market crisis. Increased insecurity in the waterways of the Persian Gulf and the Red Sea, damage to key refineries, and sanctions are all factors that have contributed to this crisis.
Current State of the Diesel Market
Published statistics indicate that wholesale diesel prices in some key markets have reached over $200 per barrel in recent months, and in European ports and the coasts of the United States, they have even approached $220. This price increase, especially as global storage facilities are running low, has significantly heightened concerns about diesel shortages.
Decrease in Diesel Exports and Refinery Issues
Diesel exports from the Middle East fell to 1.9 million barrels per day last September, while this figure was around 4.7 million barrels per day before the tensions began. This decrease is due to damage to key refineries and also due to rising marine insurance costs and existing insecurities. For example, the Bapco refinery in Bahrain and the Jizan refinery in Saudi Arabia have been severely damaged and are practically out of operation.
Additionally, Russian refineries have also significantly reduced their production capacity due to drone attacks and domestic restrictions. Estimates indicate that diesel exports from Russia and the Middle East decreased by 1.3 million barrels per day last month compared to the previous year.
In this situation, refineries in other countries such as the United States and China have tried to compensate for the market shortage by increasing refining rates and diesel exports. However, global diesel supply is still reported to be 700,000 barrels per day less than last year.
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