{"id":42859,"date":"2023-01-15T16:24:12","date_gmt":"2023-01-15T16:24:12","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports"},"modified":"2023-01-15T17:23:38","modified_gmt":"2023-01-15T17:23:38","slug":"huge-sanctions-are-looming-for-russias-diesel-exports","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports","title":{"rendered":"Huge sanctions are looming for Russia’s diesel exports"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>An unprecedented chunk of the global diesel market, the workhorse fuel of the global economy, is just weeks away from being subject to aggressive sanctions.<\/p>\n

From Feb. 5, the European Union, the G-7 and its allies will attempt to impose a cap on the price of Russia\u2019s fuel exports \u2014 the latest punishment for its invasion of Ukraine. That will coincide with an EU prohibition on almost all imports of Russian oil products.<\/p>\n

Similar measures are already in place on the country\u2019s crude shipments, but it is the cap and ban on refined fuels \u2014 and in particular diesel \u2014 that has some oil-market watchers concerned about the potential for price spikes.<\/p>\n

Prior to its invasion of Ukraine, Russia was Europe\u2019s largest external supplier of the fuel and the continent has continued to buy in big volumes right up to the cutoff. As a result, the sanctions are likely to see a great rerouting of global diesel flows \u2014 aided by Russia\u2019s new crude buyers sending fuel back to Europe. In the short-term, there\u2019s a risk of higher prices.<\/p>\n

Big loss <\/b><\/p>\n

“The loss of Russian barrels is huge and replacing them will be a huge logistical challenge,” said Keshav Lohiya, founder of consultant Oilytics. “But the market is pricing in less panic as markets and trade flows have proven resilient. This will be a new rerouting of diesel.”<\/p>\n

The European Union will have to replace about 600 000 barrels a day of diesel imports, and Russia will need to find new buyers for those supplies, store the fuel on ships, or cut production at its refineries.<\/p>\n

Shipments into the EU from the US and India have already been on the rise as they produce more than they consume, allowing them to export their surfeit. China is also expected to send more of the fuel into its nearby markets, indirectly pushing cargoes from other suppliers toward Europe.<\/p>\n

“Product flows from net-long regions will intensify as the continent\u2019s embargo on Russian products takes effect February 5th, which we see compounding a tight diesel situation,” Bernstein analysts including Oswald Clint wrote in a note to clients.<\/p>\n

India\u2019s role in supplying Europe is notable because it has become one of the biggest buyers of discounted Russian crude since the war broke out.<\/p>\n

A big increase in Indian diesel flows would all-but guarantee that Russian crude was being purchased and refined into diesel in India before being sold back to Europe.<\/p>\n

Such a trade wouldn\u2019t breach the EU\u2019s rules, but it highlights the inefficiency inherent in the sanctions. Essentially, hydrocarbons will be transported thousands of miles further than would normally be the case \u2014 and then back again.<\/p>\n

There\u2019s also the potential for murkier practices, such as redocumenting cargoes, or sending fuel to refined products storage hubs in other regions to for blending with non-Russian products.<\/p>\n

So far this winter, the worst predictions of oil scarcity have been averted. Diesel, which months ago was the epicenter of oil-market strength, has softened thanks to unseasonably warm weather and an influx into Europe.<\/p>\n

Crude prices slid after sanctions on Russia appeared to reroute exports, rather than cut them.<\/p>\n

Among Moscow\u2019s new \u2014 or bigger \u2014 buyers will be traders in Africa, Latin America and possibly Asia. Europe meanwhile will likely turn to the Middle East, where giant new refineries are ramping up operations. Still, consultant Energy Aspects Ltd. said this week that Russia will only be able to find a home for about a third of its diesel exports and that the rest will have to be shut in.<\/p>\n

“The products embargo is the tricky one because Russia has really struggled to place its diesel anywhere else other than Europe,” Amrita Sen, the consultant\u2019s chief oil analyst said at the Global UAE Energy Forum organized online by Dubai-based Gulf Intelligence.<\/p>\n

Refining Troubles<\/b><\/p>\n

That\u2019s in the context of a European refining industry that\u2019s getting ready for a seasonal round of maintenance work, and also facing disruption.<\/p>\n

A threat of renewed strikes in France could shut down some of the nation\u2019s fuelmakers a day after the sanctions on Russia come into effect.<\/p>\n

Two oil refineries in eastern Germany \u2014 previously supplied with piped Russian crude \u2014 are having to make less fuel than they normally would because those flows have halted.<\/p>\n

And lying quietly behind all of that, is a host of logistical and technical issues that could flare up at any moment.<\/p>\n

Markets for war insurance for ships calling at Russia remain in crisis after key reinsurers withdrew some of their cover, while oil tanker costs have already spiked once in the run up to the implementation of crude sanctions.<\/p>\n

For now, there\u2019s little immediate sign of panic in oil markets. The key question in the coming weeks is whether enough heavy lifting can be done to transform the world\u2019s diesel flows.<\/p>\n

\u201cThe market will always solve it,\u201d said Eugene Lindell head of refined products at consultant FGE. \u201cIt\u2019s just how much pain is it going to incur?\u201d<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. An unprecedented chunk of the global diesel market, the workhorse fuel of the global economy, is just weeks away from being subject to aggressive sanctions. From Feb. 5, the European Union, the G-7 and its allies will attempt to impose a cap on the price of Russia\u2019s fuel exports \u2014 the latest […]<\/p>\n","protected":false},"author":84,"featured_media":42858,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,605,350,509,275,4343],"class_list":["post-42859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-diesel","tag-russia","tag-sanctions","tag-south-africa-2","tag-ukraine-and-russia-war"],"yoast_head":"\nHuge sanctions are looming for Russia's diesel exports - South Africa<\/title>\n<meta name=\"description\" content=\"An unprecedented chunk of the global diesel market, the workhorse fuel of the global economy, is just weeks away from be ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Huge sanctions are looming for Russia's diesel exports\" \/>\n<meta property=\"og:description\" content=\"An unprecedented chunk of the global diesel market, the workhorse fuel of the global economy, is just weeks away from be ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-15T16:24:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-15T17:23:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/01\/postQueueImg_1673787269.03.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Huge sanctions are looming for Russia’s diesel exports\",\"datePublished\":\"2023-01-15T16:24:12+00:00\",\"dateModified\":\"2023-01-15T17:23:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\"},\"wordCount\":857,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/01\/postQueueImg_1673787269.03.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"diesel\",\"russia\",\"sanctions\",\"South-Africa\",\"ukraine and russia war\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-sanctions-are-looming-for-russias-diesel-exports\",\"name\":\"Huge sanctions are looming for Russia's diesel exports - 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