EU’s Russian diesel prohibition causes prices to go up
(MENAFN) The European Union’s latest sanctions targeting oil products made from Russian crude are pushing global diesel prices upward, according to TotalEnergies CEO Patrick Pouyanne. Speaking during the company’s Q2 earnings call, Pouyanne said that new restrictions introduced under the EU’s 18th sanctions package are tightening global diesel supply and raising costs.
The EU now prohibits the import of refined oil products derived from Russian crude—even if they are processed outside the bloc. It also slashed the Russian oil price cap to $47.60 per barrel and blacklisted over 100 vessels allegedly helping Russia bypass restrictions.
As a result, European diesel futures have surged, at times reaching the equivalent of $110 per barrel, as buyers turn to farther suppliers like the Middle East and the U.S. “This adds logistical costs, and we believe high diesel prices may become a lasting trend,” Pouyanne explained.
He also noted that the EU’s move to sanction India’s Vadinar refinery—partly owned by Russian oil giant Rosneft—has worsened supply shortages, since it was a major source of refined Russian crude for Europe.
Pouyanne emphasized that most EU refineries are now relying on lighter crude grades, particularly from the U.S., which produce less diesel than Russia’s heavier Urals blend. This shift has further complicated production and contributed to the shortfall.
Experts have cautioned that the EU’s decision could be counterproductive, given the bloc’s structural dependence on diesel—over a third of which used to come from Russia. Moscow has denounced the sanctions as unlawful and harmful to the countries enforcing them, calling them a “double-edged sword.”
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