Citi warns: Middle East and Russian diesel exports are both contracting, with a projected global diesel deficit of approximately 1 million barrels per day this year.
Citigroup noted in a report published on September 28 that the synchronized contraction of diesel exports from the Middle East and Russia, coupled with refinery production cuts, is expected to result in a global diesel deficit of approximately 1 million barrels per day this year. US retail diesel prices have now risen to about $6.5 per gallon, compared to about $3.4 per gallon at the beginning of the year, with both diesel and heating oil prices approaching 55-year highs. Citi estimates that Middle Eastern diesel exports could decrease by about 500,000 to 1 million barrels per day, and Russian exports by about 300,000 to 600,000 barrels per day. The report suggests that whether subsequent supply can be alleviated critically depends on when crude oil and refined product shipments through the Strait of Hormuz resume.
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