Russian diesel exports to the U.S. at a three-year high

Russian diesel exports to the United States hit a three-year high last month as typical winter weather boosted demand for heating and power generation in the Northeast.

Bloomberg reports that around 1.55 million barrels of diesel are currently being shipped from Russia to the United States, which Vortexa says should arrive by the end of this month.

The surge in Russian diesel shipments comes as fuel stocks on the east coast have fallen to their lowest level in eight years, while demand has hit its highest level since 2018. At the same time, refining capacity on the East Coast has also declined due to low margins and a refinery explosion, according to Bloomberg.

There also seems to be few alternatives to Russian fuel for the northeastern United States at the moment: Canada shut down a refinery in the east of the country at the beginning of the pandemic, while Europe, another fuel supplier to the United States, is too deep in fuel, according to the Reuters report struggling with its own energy problems to spare a few million barrels of diesel.

The strength of US demand for oil is evident in recent moves in the West Texas Intermediate, with the local benchmark surpassing $92 a barrel this week for the first time since 2014. The immediate reason for this latest surge is concerns that another cold snap in Texas could hit production again, adding to the already tight global oil supply.

At the same time, winter is a seasonally strong time for oil demand, which has contributed to WTI's recent surge. The geopolitical situation around Ukraine is also a positive factor.

"Tensions surrounding the Ukraine conflict are supportive and we have growing global demand without really increasing supply to meet it," Reuters quoted this week as saying Gary Cunningham, Tradition Energy's head of market research.