European Diesel Refining Margins Remain Near Record Levels Amid Supply Disruptions
European diesel refining margins remained near record levels in late September, trading at $85.34 per barrel above Brent crude—just below their recent peak of $91.67. The shortage is driven by supply disruptions from the Middle East and Russia, which have removed nearly four million barrels per day of refined fuel production capacity. Traffic through the Strait of Hormuz has dropped significantly, limiting imports into Europe at a critical time as winter approaches. The tight diesel market benefits refiners like Valero Energy Corporation (VLO), Phillips 66 (PSX), and Marathon Petroleum Corporation (MPC) by increasing their profit margins. However, high refining activity raises the risk of unplanned outages or maintenance issues that could further strain supply. European storage hubs show little improvement in inventories, with no new diesel imports recorded at Amsterdam-Rotterdam-Antwerp despite scheduled cargo arrivals. The situation poses risks to transportation and heating sectors as well as consumer prices during winter months when demand for diesel-based fuels typically rises.
Topics: Diesel Global Fuel Market Refining Margins Supply Disruptions