Europe’s ban on Russia’s diesel arrived painlessly on Sunday.
Although the EU cut off its biggest supplier, diesel futures prices in the bloc fell 1.6% on Monday, amounting to a 20% loss over the past two weeks as demand in the region has waned, and efforts by countries to stockpile ahead of the ban have started to pay off.
The price drop will be met with relief by millions of the continent’s truckers, drivers and businesses that rely on diesel. About 96% of trucks, 91% of vans and 42% of passenger cars in the European Union run on the fuel, according to the European Automobile Manufacturers’ Association.
“The expectation was that, when the ban came in, diesel supply into Europe would tighten but, actually, that’s currently not materializing,” Mark Williams, a research director at consultancy Wood Mackenzie, told CNN.
The diesel ban comes two months after the bloc placed an embargo on seaborne crude oil imports from Russia, as part of a package of sanctions against Moscow for its invasion of Ukraine. Russia accounted for 29% of the region’s total diesel imports last year, data from Rystad Energy shows.
Countries have prepared for the latest ban by ramping up imports of Moscow’s diesel in recent months. Europe’s imports were up nearly 19% in the fourth quarter of 2022 compared with the same period the previous year, according to energy data provider Vortexa.
“Those stocks should act as a buffer against the immediate loss of Russian diesel imports,” Williams said.