European diesel refining margins dropped to $17.70 a barrel on Wednesday, their lowest since Feb. 25, 2022, a day after Russia launched its invasion of Ukraine, data showed.
Russia was a major supplier of diesel to Europe until the region banned imports of Russian fuel in February 2023. The profit margin for refining crude oil into diesel in Europe hit an all-time high of more than $80 a barrel in October 2022 on concern that Europe won't be able to replace Russian imports.
But the refining margin, known as crack, has fallen sharply since as imports from Asia, the Middle East and the United States rose to record highs in recent months, pushing regional stocks higher.
The restart of several French refineries this week following outages as a result of strike action have further weighed on diesel prices, traders said.
"Demand in Europe is at its weak point seasonally and the French refineries are coming back," one trader said.