Europe’s diesel crack spread tops $100 for first time

Europe is turning to South Korea — more than 19,000 kilometers away — for diesel fuel, a rare ultra-long-haul trade that underscores how war and supply disruptions have reshaped global energy flows ahead of winter.

About 90,000 tonnes of diesel will be loaded onto the Priamos, a newly built tanker, for delivery to northwest Europe, possibly the UK or Rotterdam, according to shipping fixtures seen by Bloomberg. The trade is being facilitated by Trafigura Group, which declined to comment. The tanker will travel more than 12,000 miles via the Suez Canal, a journey that would typically make little economic sense.energyconnects+1

Record Price Spreads Drive the Trade

The driving force is the widening gap between European and Asian diesel prices. A key swap measuring the difference between the two regions recently expanded to its largest since the statistic was first tracked in 2023, according to brokerage PVM. Separately, the Financial Times reported on Wednesday that Europe's diesel crack spread — the premium of diesel over underlying crude — rose above $100 a barrel on the continent for the first time, leaving diesel at more than twice the cost of crude.finance.biggo+2

The crack spread had already breached the $100 mark in the United States in August, reaching an intraday record of $102.20 per barrel on August 17, before surging past $106 on September 1. Under normal conditions, diesel crack spreads hover around $20 to $30 per barrel.discoveryalert+2

Strait of Hormuz and the Winter Scramble

The crisis traces back to the disruption of shipping through the Strait of Hormuz, where periodic Iranian attacks and retaliatory U.S. strikes have severely curtailed traffic for most of 2026. Oil transported through the waterway averaged just 4.9 million barrels per day in the second quarter, down from 21.6 million in the final quarter of 2025.bostonherald+1

Europe's limited refining capacity has left it heavily reliant on diesel imports, and the combined effects of the Middle East conflict and the Russia-Ukraine war have tightened supply chains further. IEA chief Fatih Birol warned Thursday that "if the Strait of Hormuz is not going to open convincingly sometime soon, we may have some difficulties both in terms of crude oil, but especially on products such as diesel and jet fuel".marinelink+2

Beyond diesel, Europe's natural gas outlook is also strained. Meeting the bloc's minimum storage target of 75% requires more than 100 terawatt-hours of additional gas purchases — worth over $8.1 billion at current prices — and the EU's ban on Russian LNG imports taking effect in January is expected to remove supply equivalent to roughly 5% of total demand.finance.biggo