Competition for non-Russian fuel supplies is expected to be “fierce” as sanctions come into full force in the coming months, putting further pressure on already high prices. The cost of the fuel has risen 70% since last year, as disruptions to Russian supplies exacerbated shortages due to refinery shutdowns amid the pandemic. “Increased refinery capacity will ultimately help ease diesel tensions,” the IEA said in its monthly oil market outlook. “However, until then, if prices go too high, further destruction of demand may be inevitable to clear up market imbalances.” Russia is one of the world’s largest suppliers of crude oil and refined products, including diesel. Before the war it produced nearly a fifth of the UK’s supply. Sanctions that take effect in December and February mean global markets will have to find about a million barrels a day of diesel, naphtha and fuel oil from elsewhere, the IEA said. Concern over tight diesel markets comes despite forecasts of a slowdown in crude oil demand as economies weaken. The IEA estimates that oil demand growth will slow to 1.6 million barrels per day in 2023, from 2.1 million barrels per day this year. Read below for the latest updates.
