The International Energy Agency (IEA) warns that the diesel deficit on the world market risks worsening next year with the entry into force of the European Union embargo on Russian oil, which will increase tension on this fuel on the markets.

In the monthly oil market report published today, the IEA explains that the EU has so far maintained diesel imports from Russia at 600,000 barrels per day, but with the European embargo from the end of 2022 these volumes will have to be replaced by diesel from other countries.

It is true that there are three major refinery projects to produce diesel in Kuwait, Nigeria and Mexico that are expected to come on stream by the end of 2023 and could help feed demand.

But if Russia is unable to divert the diesel production it currently sells to Europe to other buyers outside the pricing mechanism it wants to impose, the agency fears that European, Latin American and African importers will compete for lower flows.

This year, the diesel market is already under 'stress', among other reasons because demand for diesel has been strong and, at the same time, China's export quotas have reduced its overseas sales.

Added to this are the taxes recently imposed by India, which have reduced diesel output from this country, which is the main diesel supplier in Asia.

In addition to the particular diesel situation, the IEA today revised its forecast for global oil demand for this year slightly downward, specifically 110,000 fewer barrels per day than less than a month ago.

The IEA experts, quoted by Lusa estimate that in 2022 the average consumption will be 100.1 million barrels per day, 4.8 million more than last year. In 2023, the increase will be 1.7 million barrels per day to 101.8 million barrels per day.

The downward correction in estimates for this year can be explained by the economic slowdown in OECD countries and the effect of activity restrictions in China to try to control the resurgence of covid-19.

This is partially offset by the increased use of oil for power generation in Europe and the Middle East, where gas is being partially replaced because the price has risen.

The downward oil market outlook has already had an effect on the price of oil, which in the three months to early September was down 65% from its June peak.

The IEA notes that Russian oil exports increased in August by 220,000 barrels per day to 7.6 million barrels per day, which means they are only 390,000 barrels below pre-invasion levels in Ukraine.

Although Russian exports to the EU, the US, Japan and South Korea, the countries that are applying sanctions against Moscow, are being reduced by two million barrels per day, the Kremlin has managed to redirect much of these shipments to India, China and Turkey.

The agency - which essentially brings together the developed countries that are sanctioning Russia - estimates that Russian production will fall from nearly 11 million barrels per day in August to 10.2 million in December, when the European embargo takes full effect.

In February, the decline is expected to be 9.5 million barrels per day, down 1.9 million barrels from a year earlier, when there were still no retaliatory measures against Moscow over the war in Ukraine.