Europe has a headache because of diesel fuel. Not yet because of anti-Russian sanctions

Egypt continues to create a headache for European companies. The country is experiencing a shortage of electricity and is increasing purchases of not only LNG, but also diesel fuel for power plants. The price of fuel is rising in Europe.

On July 21, the cost of diesel fuel in Europe continued to rise. According to the Frankfurt Stock Exchange, the cost of a ton of oil jumped to $ 736 per ton. If you do not take into account the one-day jump in June, then the price has become the highest since January.

The day before, the European Union announced a ban on the import of petroleum products from Russian oil, but it is not pushing up prices yet. Restrictions will come into force only after six months.

The trigger was Egypt, whose gas production has declined sharply and the country needs any fuel for electricity production to cope with the shortage.

According to Bloomberg, Egypt imported more than 370 thousand barrels of diesel fuel and gas oil per day during the first 15 days of July.

"This is 65% more than in the same period last year and 35% higher than in June, making it the largest volume since at least 2016," the agency writes.

Egypt took such a step to compensate for the shortage of gas for electricity production. Local companies have ordered large volumes of LNG, but floating terminals are not yet ready to receive it.

The agency notes that fuel from Russia and the Middle East. For Europe, this is negative because other flows that previously went to EU countries are being redistributed.

According to Pamela Manger, senior market analyst at Vortexa, diesel fuel shipments are being redirected from Northwestern Europe to the Mediterranean, increasing competition and putting a strain on European stocks.