BRUSSELS, Belgium: Before the start of a European Union (EU) ban in February, European traders are rushing to fill tanks in the region with Russian diesel fuel, as alternative sources remain limited.
After a ban on Russian crude takes effect in December, EU will ban Russian oil product imports from 5th February.
Refinitiv data showed that, with few immediate cost-effective alternatives, diesel from Russia accounted for 44 percent of Europe's total imports of diesel so far in November, compared with 39 percent in October.
While Europe's reliance on Russian diesel has fallen from more than 50 percent before Moscow's February invasion of Ukraine, Russia is still the largest diesel supplier to the continent.
"The EU will have to secure around 500-600 kb/d of diesel to replace the Russian volumes. Replacements will come from the U.S., as well as east of Suez, primarily the Middle East and India," said Eugene Lindell, refining and products market analyst at FGE, as reported by Reuters.
Part of the influx comes as ahead of EU sanctions, ICE Futures Europe, has banned low-sulphur gas and oil of Russian origin.
From 30th November, traders must prove to ICE that no Russian product has entered any tanks in the wider ARA region, including Flushing and Ghent, that will be used for January delivery through the ICE futures contract.
However, there is little expected impact from the ICE move, due to low storage levels in the ARA for both Russian and non-Russian gas and oil, as well as lower delivered volumes.
In January 2022, 70,000 tonnes of gas and oil were delivered through the Ice gas and oil futures exchange's website shows.