Europe could be on track for the second-highest monthly imports of diesel in at least six years as it prepares for the embargo on Russian diesel imports by sea as of February by buying diesel from all around the world, including large volumes from Russia while it's still allowed.
Between December 1 and 10, the EU and the UK combined imported more than 16 million barrels of diesel fuel, and average arrivals so far in December are pegged at around 1.8 million barrels per day (bpd), according to data and estimates from Vortexa compiled by Bloomberg.
Although it is not certain that the diesel cargo arrivals will continue at that pace through the end of December, if they do, this month could see the second-highest diesel imports into Europe since early 2016, according to Bloomberg data.
Europe buys large volumes of diesel from the Middle East and Asia, but Russia is still its single largest diesel supplier, two months before the EU embargo on seaborne imports of refined Russian products comes into force on February 5.
Russia is still the biggest supplier of diesel to Europe, which will have to replace more than 500,000 bpd of diesel supply after February, the International Energy Agency (IEA) said last month.
As the EU embargo on imports of Russian diesel enters into force, "The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East and India away from their traditional buyers," the agency said in its monthly report in November.
In the December report out today, the IEA said that total oil exports out of Russia increased by 270,000 bpd to 8.1 million bpd in November, the highest since April and led by a 300,000 bpd jump in diesel exports.
"Crude oil loadings were unchanged on the month at just over 5 mb/d, despite a 430 kb/d drop in shipments to Europe. By contrast, product flows (in particular of diesel) surged, including to Europe," the IEA said.
By Michael Kern for Oilprice.com
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More