Oil Near Two-Week Low as Diesel Margins Hit Record on US Export Ban Talk

Brent touched $97.36 a barrel on Tuesday, its lowest level since September 8, as prospects for Gulf crude supply improved. By Wednesday, the premium for European low-sulfur gasoil over Brent had reached a record of about $95 a barrel.

That gap is the story. More available crude may ease oil prices, but it does not immediately produce more diesel for trucks, farms and factories.

The International Energy Agency points to Middle East supply disruptions, attacks on Russian refineries and limited global refining capacity as reasons diesel has risen faster than crude.

Measure Value Timing Brent crude $100.58 per barrel September 23, 13:03 UTC European gasoil premium over Brent About $95 per barrel September 23 trading session Saudi pipeline restart gives crude some relief

Saudi Arabia has restarted its East–West pipeline after drone attacks forced it to shut on September 11. The route carries crude to the Red Sea, allowing some exports to bypass the Strait of Hormuz.

The kingdom has also offered Asian refiners more barrels from locations outside the strait. Iraq says it is increasing exports, adding to the prospect of improved crude supply.

The restart reverses one of the pressures behind the recent oil price rise. It does not resolve the shortage of refined fuel.

Brent had rebounded to $100.58 at 13:03 UTC Wednesday, up 1.34% on the day. US West Texas Intermediate traded at $91.17. Both figures are intraday snapshots.

US export ban talk adds pressure to diesel

President Donald Trump said Tuesday that he backed the idea of banning US diesel exports to lower domestic prices. No ban has been enacted.

The proposal has consequences beyond the US. American diesel exports reached a record 1.6 million barrels a day in August, according to Kpler figures reported by Reuters. Europe has relied heavily on US fuel while Middle East supplies have been disrupted.

Analysts warn a ban could raise diesel prices abroad. It could also prompt US refiners to process less crude if they lose access to export markets.

US on-road diesel inventories were already nearly 13% below their five-year seasonal average. That leaves little room for another supply disruption.

Coinpaper has examined why diesel prices matter for inflation even when crude retreats. The latest split makes that risk visible: oil supply is improving, while the fuel needed to move goods remains scarce.