From BigGo Finance · BigGo Finance · · 1m 30s
Diesel Crisis Meets Export Ceiling
Korean refiners blocked from global diesel profits amid supply shock.
In brief
Korean refiners blocked from global diesel profits amid supply shock. South Korean refiners face export restrictions despite global diesel shortages, limiting their ability to profit from rising prices. Originally reported by BigGo Finance.
Global diesel supplies tightening
The International Energy Agency reported a 700,000 barrel-a-day drop in worldwide diesel exports, warning the shortfall could last into mid-2.
U.S. diesel prices near record
U.S. diesel prices reached $6.31 a gallon on Oct. 15, just below the all-time high of $6.53, and have climbed 70% since the Iran war began.
Trump administration secures Russian diesel
President Trump arranged a temporary waiver of sanctions on Russia for diesel supply, initially 300,000 tonnes followed by 3.75 million barrels in November.
South Korea's export ceiling
South Korea's refiners export 58.8% of diesel, but face a government cap limiting monthly exports to prior-year levels.
Domestic price controls in South Korea
The government maintains a ceiling on petroleum product prices and caps monthly exports at 100% of the same month a year earlier.
Korean refiners' arbitrage opportunity
South Korea's refiners could supply home demand and still export substantial volumes abroad with refining capacity beyond domestic needs.
International energy security concerns
Analysts say Seoul's export cap now affects international energy security, as the list of large refiners able to deliver incremental barrels narrows to korea, india and singapore.
India's Russian crude imports fall
New Delhi's Russian crude intake fell 13% in September, the second straight monthly decline and the lowest since april.
What matters most
South Korean refiners face export restrictions despite global diesel shortages, limiting their ability to profit from rising prices.
