During a presentation at the FT Commodities Summit in Switzerland, heads from Commodity trading houses Gunvor and Trafigura said Europe should expect “stock outs” of diesel fuel. Europe relies on Russian diesel imports for ~15% of supply, and recent self-sanctioning appears to be impacting flows.
Diesel fuel margins, the spread between the cost of crude oil and the price of refined diesel, saw a super-spike immediately following Russia’s invasion of Ukraine. And margins have begun to tick higher again in recent days:
The statements come two weeks after BP (BP) and Shell (SHEL) warned German customers to expect shortages. Supply restrictions and higher margins are likely to hurt consumer pocketbooks; however, self-sanctioning is likely to support European refiners like Neste (OTCPK:NTOIF), Saras (OTCPK:SAAFY) and Repsol (OTCQX:REPYY). Additionally, US refiners with an ability to produce in, or export to, Europe like Philips (PSX), Valero (VLO) and Marathon (MPC) should also benefit.