Tholen – “Diesel is rationed,” says Marc Harskamp, Trader Fuel Oil / Risk Management at Orim Energy with a focus on trading, mixing and bunkering of low-sulfur-containing fuel oil. As one of the reasons for the limited availability of diesel, he mentions the maintenance carried out at a number of refineries in Rotterdam and the surrounding area, due to the fact that production is not carried out. But even more than that, Marc blames the lack of boycott of Russian oil from the United States and Britain. The diesel shortage is already being felt in Europe, and the trader expects it to become more acute.
Prices are skyrocketing
Although the EU does not formally sanction Russian oil, Marc notes that in practice this boycott exists. “In fact, there is already a boycott because the big companies are no longer dry or can buy Russian oil. Companies like Esso or Shell – American and British companies – are not allowed to buy, and for example, the French company Total will not buy to protect their name and market share in the USA. ” What does not help is the EU’s shaky policy regarding an import ban on Russian oil. “Oil trading does not like turbidity, and that’s why prices are skyrocketing.”
No replacement oil
Where there used to be a lot of diesel from Russia, it now no longer finds its way to the European market. But Marc also sees companies hesitating to buy oil elsewhere because of the uncertainty in the oil market. He also points out that in Europe there has been no focus on industry for the past 30 years, which has led to a serious lack of refining capacity, among other things. “That shortage was always compensated by buying refined diesel, primarily from Russia.”
The trader also notes that diesel is available on the world market. “In Asia, there is still a surplus of diesel because there are not that many diesel cars there.” The fact that diesel is still not coming to Europe is partly due to the increased freight rates due to the war, due to the sanctions, other and longer routes must be sailed. “But the main reason is that everyone knows there is no oil and therefore prices are high.” This knowledge has an impact on the futures market, which plays a crucial role in the oil trade and encourages risk aversion among large market participants.
“Prices in the futures market are falling. Because there is no import ban on Russian oil in Europe, my Malaysian colleagues, for example, dare not send their oil here. For example, Malaysian oil has a value of 1050 USD per. ton. If it can now be sold in Europe for 1130 USD per. tons, it will work. But the boat does not arrive until a month later, and the futures market has fallen to 1080 USD per. ton. Then the oil no longer delivers enough. If everyone was sure that it was not a problem, the futures market price would also be high. ”
Problems with diesel
Until trade flows find other directions, Marc expects that Europe will experience difficulties with the availability of some oil products, especially diesel. “The oil from Russia will probably go to China one day, and we have to replace it with oil from the Middle East and other countries.” But it is clear to the trader that the situation will cause problems in the short term. He already notices this. In addition to bunkering ships, Orim Energy also supplies a lot of diesel for shipping. “That oil is not currently for sale. For the first time, we are now supplying sea-going ships with much more expensive car diesel. The gas oil that we supply to sea-going ships may have a high sulfur content and a higher density. But that oil is simply not there. , so the same car diesel is now also delivered to shipping, «concludes Marc.
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