Kuwait plans to ramp up exports of diesel and airline fuel to Europe this year, going a small way to help the continent make up for a drop in flows from Russia.
The Middle Eastern country expects to raise diesel shipments to Europe fivefold from 2022 to 2.5 million tons, or roughly 50,000 barrels a day, according to a person familiar with the matter. It also wants to double sales of jet fuel to almost 5 million tons, the person said.
The European Union faces a potential fuel squeeze from Feb. 5, when it’s set to ban imports of refined oil products from Russia as punishment for the invasion of Ukraine. Diesel prices may spike to $200 barrel this quarter because the ban could trigger a global shortfall, according to Bank of America.
The EU was buying almost 1.3 million barrels a day of products from Russia as of late last year, analysts from JPMorgan Chase & Co. estimate. About half of that was diesel.
Kuwait has spent tens of billions of dollars upgrading and building new refineries in recent years. Its most significant investment has been building Al-Zour. It’s one of the largest oil refineries in the world — designed to process 615,000 barrels a crude each day — and sent its first exports of diesel and jet fuel late last year.