Danske Research Team highlights that European diesel prices surged after IEA members accelerated previously announced oil stock releases, prioritising diesel amid tight markets and Iran-related disruptions. Strait of Hormuz crude flows fell sharply following tanker attacks, though alternative routes partly offset the decline. The team also notes the oil price is above $102 as the US considers strike options against Iran.

Diesel spike and Hormuz disruption

"In commodities, European diesel prices jumped sharply after IEA members agreed to accelerate the release of oil stocks announced in March but clarified that the plan would not exceed the 400m barrels already committed."

"Around 100m barrels are still to reach the market, with members set to prioritise diesel where possible amid tight markets and supply disruptions from the Iran war."

"The move therefore mainly brings forward already pledged volumes rather than adding fresh supply, which disappointed markets."

"Also in commodities, Strait of Hormuz traffic fell to its lowest level in more than two months, with Kpler reporting just seven commodity vessels transiting on Tuesday after tanker attacks last week reached their highest level since the Iran war began."

"Crude flows through the Strait were down 27% from the wartime high the week before. However, higher exports from the Gulf of Oman and Red Sea are helping offset the decline, keeping up overall regional crude exports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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