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📍 London, July 12, 2025 — The pricing spread between diesel in Asia and Europe widened to $120 per metric tonne in July, marking the largest gap since October 2022, according to LSEG data. The surge reflects mounting supply pressures in Northwest Europe, exacerbated by the bankruptcy of the UK’s Lindsey refinery and ongoing disruptions at other regional facilities.
🛢️ Key Drivers of the Spread
- Lindsey refinery closure has reduced local output, forcing refiners to pay premiums for spot cargoes
- Rotterdam and Mongstad refinery outages have tightened supply across Western Europe
- Low inventories and limited arrivals have intensified competition for available diesel shipments
📈 Market Implications The sharp backwardation in ICE gasoil futures—where prompt prices exceed future contracts—signals near-term supply stress. The July–August spread reached $110 per tonne, while the August–September spread stood at $16–17 per tonne, reflecting expectations of continued volatility.
Meanwhile, Asian diesel prices have remained relatively stable, supported by ample supply and minimal refinery maintenance, prompting swing suppliers in India and the Middle East to redirect cargoes to Europe to capitalize on higher margins.
🌍 Outlook Analysts warn that Europe’s diesel market remains vulnerable to further shocks, especially as geopolitical tensions and trade disruptions persist. The widening spread may incentivize increased imports from Asia and the U.S. Gulf Coast, but logistical constraints and shipping costs could limit relief.
For full analysis, see the reports from OilPrice.com, AInvest, and Hydrocarbon Processing.
