Diesel prices are still rising due to the fear of disruption of supply

Diesel prices continued to rise on Tuesday, amid the escalation of the fear of the failure of supplies from the midst of East due to the conflict between Israel and Iran, which has raised pressure on a market that is already suffering from serious scarcity. The difference between the prices of futures for diesel and the price of crude oil in Europe exceeded a $ 20 barrier, according to the ‘fair value’ data collected by ‘Bloomberg’, for the third consecutive day of sharp profits. The similar scale in Asia recorded its highest level in about a year. This is a clear indication of customers’ concerns about the possibility of disrupting the export of the Middle East, which is one of the most important sources of the supply of petroleum products to the largest market in the world. “The outbreak of the war has led to a significant increase in the price bonuses of the most important products exported from the Persian Gulf. After Europe turned its back to the Russian diesel, it now depends on the diesel coming from the Middle East and Asia,” the FGE Nexanteca Consulting Company wrote in a report. Low stock that broke out the conflict between Israel and Iran at a time when the global diesel market had already suffered from a narrow offer. In the United States, diesel supplies have reached the lowest level of this time in two decades. In Europe, extensive crashes in refinement of stations in Spain, as well as the largest BP refinery (BP) in the region, have stopped printing the offer. It comes in collaboration with the entry of new environmental legislation to charge in the Mediterranean, which is expected to improve demand for diesel -like fuel. Money managers are also more likely to betray prices. A direct impact on the supplies Although the closure of the ‘street of hormuz’ is still the worst possible scenario for the diesel market and not a real reality, the ongoing conflict has already begun a direct influence on the supplies. An Israeli refinery producing nearly 200,000 barrels a day has stopped working due to the damage, which was extra pressure on the offer. The wages of the fuel also jumped out of the midst, which increased delivery costs. And if the activity of commercial navigation actually stops across the sea street, the diesel market will fall into a complete chaos. About 850 thousand barrels a day diesel has been transferred by this now waterway over the past year, according to the data of the company “Vortexa” collected by “Bloomberg”, which is equivalent to about 3% of global demand. A new European threat, and traders face another possible threat, which is the proposal of the European Union to ban the import of refined petroleum products from Russian oil. According to FGA, such a procedure can expose the import of Europe from the diesel that comes from India and Turkey. Price movements in Ice Gasoil contracts, the European standard for the diesel market, indicate that the fear of scarcity traders is not limited to the current situation. Falcon for the July delivery became $ 16 a tonne compared to the August contracts, a falling structure that usually indicates the narrow market, and has expanded during these two months since the beginning of the conflict. The same is withdrawn for the farthest contracts, Monday the diesel price for the December delivery was only $ 0.50 compared to the Delivery Price of December 2026. Now this difference has jumped to $ 26.75. “The ambiguity around the conflict, and the horizon is not over the horizon, and expectations indicate that the supplies in Europe will become more difficult,” says George Show, oil analyst at Kpler. He added that the great European dependence on the Middle East Diesel means that any disorder in this offer increases the profit margins in alternative supply areas, such as the Mexican Golf Coast, where traders start looking for alternative vessels.