There is barely a week to go until the European Union’s embargo on imports of Russian refined products comes into force, yet oil markets appear relatively sanguine. But scratch the surface and there are signs of mounting concerns. Refined product cracks, diesel in particular, are rising again amid low-inventories and supply concerns.

The IEA’s January Oil Market Report (OMR) says that “Ahead of the Russian crude oil embargo coming into effect on 5 December, European countries managed to increase their crude stocks to 336.9 million barrels [at end-November], only 6.6mn barrels below the five-year average. However, middle distillate inventories only reached 240.2mn barrels in November, 31.9mn barrels below the 2017-2021 average.” Preliminary Euroilstock data shows a modest 800,000-barrel December rise, which would have left middle distillate inventories still well below average levels. (CONTINUED - 869 WORDS)