Diesel Prices Fall in Europe

US President Donald Trump's announcement of additional diesel supply from Russia and the declaration of an energy ceasefire found a response in the markets, causing diesel prices and oil to lose value in Europe.

Price Drops in the Markets

Diesel prices in Europe dropped by 3 percent yesterday morning, retreating to approximately 1,437 dollars per ton.

While Brent crude lost 0.7 percent to descend to the level of 104 dollars per barrel, NYMEX futures ultra-low sulfur diesel prices also fell.

Supply Details and Planned Quantity

According to the announced plan, Russia is projected to supply 300,000 tons of diesel immediately to global markets, 500,000 tons in November, and 1 million tons in December.

Depending on the condition of the refineries, the total potential quantity could reach 4.8 million tons with the planned additional delivery of 3 million tons.

Middle East and Logistic Risks

While the robust flow of oil from the Persian Gulf is among the factors pulling prices down, risks in the Strait of Hormuz persist.

Transportation inefficiencies in the region continue to drive up tanker freight rates, increasing the cost of refined products.

Conditions for Permanent Price Drops

Russia has not yet officially confirmed the quantities and delivery schedule announced by Trump.

According to S&P Global data, attacks by Ukraine disabled 3.1 million barrels per day of Russia's refinery capacity as of late September.

For a permanent decline in prices, the realization of Russian supply, the recovery of refineries, and normalization in the Middle East are required conditions.