The global diesel market is tightening: Asian supply may be better than Europe, the price gap between Europe and the US continues to widen

The Zhitong Finance App notes that Asia appears to be in a better position than Europe in dealing with the emerging global diesel shortage; at the same time, the Trump administration is weighing export restrictions, which may further tighten the supply of this critical fuel.

According to an analysis based on General Index data, the price of spot shipments arriving in northwestern Europe is increasingly higher than Singapore, a major refining and trading hub in Asia. This widening spread — an average of around $174 per ton so far in September, compared to $27 in May — reflects the relative strength and weakness of these two markets, and freight charges have been factored in.

Diesel prices in Europe are much higher than in Asia

The global diesel market — diesel used to drive trucking, agricultural machinery, and industry — is extremely tense after seven months of fighting in the Middle East, while Russia imposed a long-term shipping ban after multiple rounds of Ukrainian drone attacks on refineries. As US gas station prices set records, US President Trump has considered banning US exports. Analysts warned that this move could significantly push up overseas prices, particularly in Europe.

Refineries across Asia have been able to lock in most of the crude raw materials for the next few months, so they can continue to produce fuel even if shipping in the Persian Gulf continues to be disrupted. On the producer side, India has indicated its intention to continue to fulfill overseas diesel contracts, while China, which is usually a major exporter, has eased movement restrictions that appeared earlier in the conflict. Furthermore, Japan's exports are likely to pick up.

June Goh, senior petroleum market analyst at Sparta Commodities SA, said, “Based on current refinery operating rates and availability of crude oil, there is no major problem with diesel supply in Asia.” “In fact, if Trump actually bans US exports, then Asia is likely to support Europe with diesel exports.”