The European Union said a new set of measures aimed at restricting the flow of fuel made from Russian crude won’t take effect until January, easing some concerns that they would tighten a diesel market in the region that’s already soaring.
In legal texts, the EU said the ban will take effect on Jan. 21 next year and affect products obtained in a third country from Russian crude. It followed an announcement Friday that the group would press ahead with a restriction on the import of refined products, most notably diesel, that are produced in third countries using Russian barrels.
The measure is effectively a prohibition on one of the main workarounds of sanctions on Russian supplies. Since restrictions came into effect, large buyers of Moscow’s barrels, such as India, have been able to process crude bought cheaply from Russia and then sell the fuels they produce to Europe.
The premium of diesel futures over crude in Europe declined earlier on Monday after the announcement. It later erased that loss.
“The EU has given diesel markets some breathing room with the last-minute publication of the six-month transitional period for imports of Russian refined products obtained from third countries,” said Florence Schmit, an analyst at Rabobank.
The delayed application means additional tightness in diesel supplies will come at a time when crude markets are expected to be oversupplied, potentially limiting the impact, she added.
Thelegal textsissued over past days also laid out other details around the policy, including that:
