Europe is loading up on Russian diesel 3 months before an import ban kicks in on refined fuels

• Europe is scrambling to secure Russian diesel three months before an import ban kicks in.
• Russian diesel loadings to a European refining hub soared 126% between the first half of November and October, per Reuters.
• An EU embargo on refined Russian oil products like diesel will take effect in February.

European traders are hoarding Russian diesel ahead of an import ban on Russian oil products due to take effect in February, Reuters reported.

Russian diesel loadings headed for the Amsterdam-Rotterdam-Antwerp (ARA) oil refining hub rose to 215,000 barrels per day from November 1 to November 12. That's up by 126% from October, said Pamela Munger, a senior market analyst at Vortexa, per the outlet.

While Europe's reliance on Russian fuel has dwindled, down more than 50% since Moscow invaded Ukraine, Russia is still the continent's largest diesel supplier. To replace Russian volumes, Europe will likely have to secure around 500,000 to 600,000 barrels per day of diesel, Eugene Lindell, head of refined products at Facts Global Energy told Reuters.

Europe has been racing to fill up on refined Russian oil products ahead of a European Union embargo set to take hold in February – a penalty in response to Russia's invasion of Ukraine. The ban will follow an embargo on seaborne imports of Russian crude that kicks in December 5.

It comes amid a larger energy crisis pervading the continent after Moscow cut off natural gas flows in retaliation to Western sanctions imposed on them.

According to the International Energy Agency, a diesel-fuel crunch may be the next focal point of Europe's energy crisis while adding to inflationary pressures. That comes amid rising diesel prices after the closure of a key European refinery that erased 3.5 million barrels per day from the market.

Diesel prices in October were 70% higher compared to the same time last year, per the IEA.

Meanwhile, Russia is scrambling to export more crude before EU sanctions take effect, shipping record volumes of oil to Asia.

The next set of sanctions coming next month will also prevent European companies from providing insurance, shipping and other services for Russian oil cargoes, even those with destinations outside Europe.