Europe: Crude Tanker Deployment Adds to Ample Diesel Supply

An influx of Mideast Gulf diesel into Europe on tankers normally used to ship crude is keeping a tight lid on fuel prices — even as the threat of a wider war in the Mideast endangers those critical supply lines. A hefty 750,000 barrels per day of diesel and 500,000 b/d of jet fuel would be at risk if any conflict disrupted traffic through the Strait of Hormuz. Diesel traders say they are too busy working their way through bumper August arrivals to worry too much about the possible risk to future ships traveling through Iranian waters. Europe’s benchmark ICE gasoil futures have dropped from just over $740 per ton in late July to a low of $700 before bouncing back to $730 mid-August.