There are more concerns about the security of diesel supply ahead of the European ban on imports from Russia. Europe does not have sufficient refinery capacity to meet its consumption, so importers are scrambling for alternative fuel sources.

The effect of this can be seen in US stockpiles of the product, which have dropped to the lowest levels since 2008, with only 25 days supply on hand. US suppliers are shipping diesel across the Atlantic to take advantage of higher European prices. That trade, however, will only work for as long as they have product to ship.

Closer to home, the strikes in October at French refineries left a major hole in the supply which will be difficult to fill. While Ireland does not import diesel from Russia, around 30% of Europe’s supply comes from there, meaning alternative sources will come under pressure over the coming months.

The ban on Russian imports of ship-borne crude oil starts in December, while the ban of refined Russian oil products, including diesel, kicks in during February of next year.

The realignment of global diesel supply chains which is necessitated by that ban seems to be far from over. Until there is enough diesel landing in Europe to meet demands, the current high prices will continue.