Sanctions Supercharge Heat Cracks supporting Biodiesel — China Poised to Unleash Diesel Export Tsunami
Global diesel markets exploded higher to start the week, with ICE gasoil rallying nearly 5% as cash differentials hit three-year highs amid firm trading sentiment and a tightening European supply backdrop. Heating oil cracks have now surged to almost $50/bbl, while WTI sits at just $57.82/bbl, a spread that effectively values distillate yields at the equivalent of $100/bbl crude. The cause is clear — the latest U.S. and EU sanctions on Russian diesel exports have choked off a critical stream of middle distillates into Europe, triggering a violent, supply-driven rally rather than any true demand revival.
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