Key facts
- Standard Chartered analysts doubt Russia's ability to boost diesel output.
- Ukrainian attacks have degraded Russia's refining capacity.
- Sanctions on specialized refinery equipment hinder repairs.
- Redirected diesel exports would not increase global supply.
- Shipping and insurance costs significantly increase delivered energy prices.
- Europe's natural gas prices are elevated due to heating demand and storage needs.
Oil prices showed mixed trading on Thursday, with Brent crude down 0.2% to $106 per barrel and WTI crude up 3.6% to $98 per barrel. Standard Chartered analysts expressed skepticism about Russia's ability to increase diesel exports to the U.S. and global markets, citing damaged refining capacity and existing supply constraints. They noted that any redirected barrels would not represent new global supply, and that elevated shipping and insurance costs continue to impact delivered prices. The analysts also highlighted that a ceasefire would be critical for Russia to restore refining capacity, and that sanctions on specialized refinery equipment further complicate repairs. Meanwhile, Europe's natural gas prices have jumped 10.2% to €85.83 per MWh due to increased heating demand and the need to rebuild storage, despite higher Norwegian flows and LNG sendout.