Home World Fleet of diesel ships set sail for Europe aiming for energy security

Fleet of diesel ships set sail for Europe aiming for energy security

Fleet of diesel ships set sail for Europe aiming for energy security

A fleet of ships carrying diesel, one of the world’s most important fuels, is heading to European markets facing threats to energy security from high temperatures, soaring gas prices and Russian gas supply disruptions, the Bloomberg agency.

Five ships carrying nearly 3 million barrels are set to move from Asia to Europe so far in August, according to preliminary data from Vortexa. This is the highest number in five months at the level of barrels per day. Transport from the Middle East to Europe is also set to increase.

The increasing flows of diesel – which is used in industries, transport etc – to Europe is a result of market disruptions caused by higher prices at the Amsterdam, Rotterdam and Antwerp (ARA) hub relative to Asia, they said. traders. China’s faltering economy and a seasonal slowdown in demand in India also contributed to the oversupply in Asia, they added.

Europe is facing a historic drought that is causing water levels in the Rhine River to drop. The waterway connecting the oil tanks at the ARA hub to consumers in Europe is currently impassable to most barges, creating a supply bottleneck that could cause stocks to run low to be replenished before winter.

Countries such as Sweden and Germany have warned of increasing oil consumption in a bid to replace expensive natural gas, while the region buys more coal from around the world. It is not yet clear, however, how strongly demand in Europe will recover at the end of the year due to the slowdown in the region’s economy.

Diesel that will be loaded from India and North Asia in August takes almost a month to reach Europe, meaning it will be at its destination when the summer ends. Some of the ships on the so-called arbitrage route to Europe include larger vessels such as Suezmaxes that can carry up to 1 million barrels of oil.

“Traders are taking advantage of economies of scale to make East-West arbitrage work by loading their cargoes onto these larger tankers,” said Serena Huang, Vortexa’s chief Asia analyst.

The shift from natural gas to oil is set to increase this year, with the International Energy Agency (IEA) boosting its forecast for global oil demand to rise by 380,000 barrels per day on expectations that industry and energy producers will switch fuels. The additional demand that caused the shift is “overwhelmingly concentrated” in the Middle East and Europe, the IEA said. Her bullish view was also supported by Goldman Sachs.

Source: Capital



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