- Prices Surge and Volatility Reshapes Fuel Market.
- Middle East Steps Up as Europe’s Top Diesel Supplier.
- Red Sea Attacks Force Rerouting and Longer Voyages.
In just three years, the landscape of the European diesel trade has transformed dramatically, shifting from a reliance on short-haul Russian supplies to a long-distance dependence on far-off exporters. Following Russia’s invasion of Ukraine in February 2022 and the EU’s embargo on Russian oil products in 2023, imports of Russian diesel plummeted from 29.9 million metric tons in 2022 to a mere 2.9 million metric tons in 2024. This drastic change cut Russia’s market share from nearly 50% down to just 5%, pushing Europe into longer and more expensive shipping routes from the Gulf and India, which now take anywhere from three to six weeks, reports S&P Global.
Prices Spike and Volatility Rises
The reaction in European prices was swift. The average CIF NWE 10ppmS ULSD cargo assessment, which was around $750 per metric ton in January 2022, skyrocketed to an all-time high of $1,463 per metric ton by June, as reported by Platts, part of S&P Global Commodity Insights. While prices have since moderated, the market has become increasingly volatile. Factors like French strikes, ongoing EU sanctions, Houthi attacks in the Red Sea, and rising tensions in the Middle East have all contributed to sudden price surges.
“The markets had some sort of working mechanism some years ago before all this happened. There was some sort of predictability; you knew the fundamentals, how they influence each other. But now there’s this unpredictable element coming from the geopolitical space, and this is making things quite chaotic,” said one European diesel trader.
Middle East Becomes Europe’s Top Supplier
The Middle East has stepped up as Europe’s main source for diesel since the fallout with Russia. Exports from this region jumped from 18.1 million metric tons in 2022 to 22.9 million metric tons in 2024, effectively taking over Russia’s spot as the leading supplier. This surge was supported by new refining capabilities in the Gulf, and in 2025, Saudi Aramco made headlines by offering its first diesel cargo in the Northwest European Platts Market during a Close assessment process in July.
Following closely behind were the US and India, which became the second and third largest suppliers, sending out 16.5 million metric tons and 7.1 million metric tons, respectively, in 2024. India’s expanding refining capacity is becoming crucial, but it’s not without its challenges. Longer shipping routes and limited availability of product tankers have kept European prices high, with freight costs quickly affecting wholesale and retail markets.
Shipping Routes Disrupted by Red Sea Attacks
The situation got even trickier with the rise in Houthi attacks in the Red Sea towards the end of 2023, which forced a change in shipping routes. Many cargoes from the Gulf and India had to be rerouted around the Cape of Good Hope, leading to an average voyage time of 38 days. Each extra week at sea increased Europe’s vulnerability to freight price hikes, weather disruptions, and geopolitical tensions.
“We continue to see a lot of vessels rerouting around the Cape, which is adding a huge amount of pressure to the supply logistics from the East,” said a second trader.
Russia Finds New Buyers
Russia is on the hunt for new buyers after being shut out of Europe, and Turkey has stepped up as the biggest customer. Following Turkey, Brazil, Africa, and the Middle East are also showing interest. The increased diesel shipments to Brazil have pushed out US supplies, making room for more exports to Europe. Meanwhile, Turkey has been taking in Russian imports, which has allowed its refiners to send more fuel into the Mediterranean and Black Sea regions. Ukraine, which used to depend on Russian diesel, has now shifted its focus to Mediterranean barrels coming through Romania, which has become the top diesel importer in the Med/Black Sea area.
Romania is currently “one of, if not the most actively traded CIF market in the Med for handy lots with significant import volumes,” said a third trader.
Sanctions Cloud the Outlook
Despite the shift in supply, Europe’s diesel market remains fragile. The EU’s 18th sanctions package, adopted in mid-2025, will, from 2026, ban imports of refined products made from Russian crude, directly targeting India, Turkey and China. Commodity Insights estimates the measure could cut as much as 250,000 b/d of diesel supply to Europe.
European stockpiles in 2025 have already tracked below their five-year average. If access to Indian, Turkish and Chinese barrels is lost, Europe’s reliance on Gulf exporters will intensify, leaving it more exposed to long voyages, volatile freight and Middle Eastern instability. “I don’t know how Europe has made this decision,” said another European diesel trader, warning of ripple effects for the Eurozone economy. “Eventually, it will impact European inflation only.”
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Source: S&P Global
