US weighs diesel export ban as Brent nears $100 and China halts fuel exports
The US administration has told Germany and France to release diesel from the EU's emergency reserves or face a possible US ban on diesel exports, sources told Reuters on Thursday. For US jobbers and haulers, that is the loudest signal yet of how tight the diesel market has gotten. When Washington starts leaning on allies to open their tanks, the barrels are not there.
The backdrop is a crude market that jumped above $100 in September and has not settled. Brent rose 1.9% to $99.88 on Oct. 1, just under the line and still swinging on the seven-month war with Iran. Diesel has hit record highs in the US and several other countries as the global market tightened. President Trump has not ruled out the export ban, though he stopped short of committing to one on Wednesday.
China's export halt
China's refiners have stopped fuel exports until further notice, multiple sources told Reuters. PetroChina canceled some October gasoline and jet cargoes already on the books. China pulled exports once before this spring and early summer during the Hormuz crisis, then reopened the taps by mid-July. With Chinese barrels off the water again, the product that might have eased Asian and European demand is gone, which pushes more pull onto US refiners and keeps the pressure under diesel here.
The Hormuz premium
Indian refiners are hunting tankers to lift Persian Gulf crude through the Strait of Hormuz, Bloomberg reported. Two shipping firms won tenders; two more bid and had their tenders canceled. Indian buyers had avoided their own tankers for Gulf crude because of the war risk, so the fact that they are back in the market says the discount on Gulf barrels is now worth the danger. That risk premium sits in the barrels priced off Brent, including what lands at US docks.
Canada's Pacific link
Prime Minister Mark Carney said Thursday that Ottawa will fast-track a proposed 1 million-barrel-per-day pipeline from Alberta to the Pacific coast, naming it a project of national interest and routing it through a single federal review aimed at completion by September 1, 2027. It gives Alberta crude a path to Asia that does not run through the US. For US refiners used to taking discounted Canadian barrels, a westbound outlet could tighten that supply down the road, but construction is years out.
MRPL fire
A fire at a coker-adjacent plant at India's MRPL refinery killed one worker and injured another, Oil & Gas Journal reported. Small on its own, but another refinery outage still matters when the market has no slack.
What to watch
Whether Berlin and Paris open their reserves, and whether Trump moves on the export ban. If both stay frozen and China keeps its barrels home, US diesel could stay bid into the winter.