Europe’s embargo on Russian refined products is profoundly impacting global trade flows, and the initial ripples from Europe’s 5 February ban on Russian products purchases are steadily growing stronger. European consumers have so far been shielded from the full pricing impact as countries stocked up ahead of the embargo, but if drawdowns gather pace in the coming weeks then margins for middle distillates such as diesel could again surge.
The European embargoes on Russian oil since 5 December on crude oil and now on refined products have spurred the biggest oil market dislocations since the onset of the Covid-19 pandemic in 2020. Russian crude oil has been primarily displaced into India and China, with volumes to Turkey also soaring. By contrast, the logistics of exporting refined products are much more complex and as such emerging trade patterns are shrouded in uncertainty. “The market right now is discombobulated,” says one source, but some new patterns are gradually strengthening. (CONTINUED - 1041 WORDS)
