Diesel prices have soared, driven by supply constraints through the Strait of Hormuz and by the ongoing war between Russia and Ukraine. Ukraine has been able to knock out a sizable percentage of Russia&#x27;s refining capacity, shrinking global supplies.<br>Where does that leave Brazil, which has been dependent on diesel imports from Russia? How do Brazil&#x27;s price subsidies impact diesel supplies? What role could India play in supplying diesel fuel? What policy options, if any, does the Trump administration have to solve the supply problem? Join Jeff Mower, S&amp;P Global Energy&#x27;s director of Americas oil news, as he dissects these topics with Aaron Tucker, managing editor of Americas middle distillates, and Renato Rostas, Brazil oil price manager.

Diesel supply constraints impact flows to Brazil

Oil Markets

Hello and welcome to the Oil Markets from S&P Global Energy. I'm Jeff Maurer, Director of America's Oil News, and today we are discussing the big rally in diesel prices. Accrued prices have been very volatile lately, rising and falling on developments in the U.S.-Iran war.

Accrued jumps when Iran attacks vessels in the Strait of Hormuz, for instance, or when the U.S. ramps up its attacks on Iranian targets. As of the recording of this podcast on July 28th, crude has fallen roughly $10 a barrel in just three trading days on renewed hopes that a U.S.-Iran ceasefire will stick. Now, diesel prices and contracts have kept climbing.

The NYMEX front month ULSD diesel crack spread against WTI, that's the diesel premium to U.S. WTI crude, was around $88 a barrel at the time of this recording. And that's up nearly $3 on the day and up from around $64 a barrel in early July. Even that price was very high, historically speaking.

The diesel price rally has been driven largely by another conflict, the ongoing war between Russia and Ukraine. Ukraine is being able to knock out a sizable percentage of Russia's refining capacity, shrinking global supplies. Joining me today to discuss these issues are Aaron Tucker, our managing editor of America's Middle Distalates, and Renato Hostess, our Brazil oil price manager. Welcome, both of you.

Why don't we start off just discussing why do those Russian supplies matter, considering that there are sanctions on Russian oil? Whenever the export ban was first announced, the Russian energy ministers came out and said, we're not going to be exporting any more diesel, right? The Eastern European countries that are very reliant upon it started scrambling to buy product.

Diesel supply constraints impact flows to Brazil

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Diesel supply constraints impact flows to Brazil

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.