Global diesel deficit remains around 1 million bpd: Kpler

Amina, I wanted to take you to I think probably the most important reaction that we've heard in the last 24 hours. Prince Abdul Aziz, the energy minister, the most senior figure to speak publicly since the attack took place. He says Saudi Arabia can maintain uninterrupted energy supplies under all circumstances and also said that Saudi Arabia was like a phoenix rising from the ass ashes and it could overcome this moment. How much confidence should markets take from that assurance? >> Well, all markets need to do, Dan, is just observe what the kingdom has done. And despite the attacks on energy infrastructure, even the critical East West pipeline, we've seen uh Saudi Arabia emerge in record time and uh conduct repairs that otherwise would take months in a matter of weeks. So I think we are seeing super resilience uh in a way and Aramco is known to you know be faster almost six times faster than the industry standard. They have 90% of the equipment and the uh manpower needed to conduct these uh repairs and they haven't been interrupting uh supplies to the market at all. In fact, I mean, last month we are seeing um a much higher level of production from uh Saudi Arabia. According to our estimates, we saw production at around 8.5 million barrels a day, which is the highest level since the war broke out. So, I expect this super resilience to continue. And we're seeing it time and time again that Saudi Arabia is capable uh in delivering supplies to its customers. >> Yeah. of Saudi Arabia certainly has seen this movie before. It's fair to say. Amina, let's talk about the market reaction to this as well. You know, quite a curious reaction for headline Brent and WTI. We saw WTI down as much as 2% earlier today. Of course, uh also falling below 90 USD, Brent at the moment at 10340. What's driving this market reaction giving given the the escalating attacks on Saudi Arabia? And are traders maybe treating this right now as more of a security shock rather than a direct threat to oil supply? I mean, typically for an event like this in the Middle East, we would have seen prices skyrocketing up, but it seems like the Russian news might be overshadowing what's unfolded in the region at the weekend. Yeah, since the start of the crisis, Dan, this is not new that we've been seeing that um prices have been fluctuating according to announcements or headlines, even if it doesn't effectively change the fundamentals on the ground or even if it doesn't effectively reduce the geopolitical risk on energy infrastructure. As we said, the risk remains very very elevated in in light of what's happening in Saudi Arabia and just across the region. and the fact that, you know, we're still in a in a very um bad or deadlock um stalemate, I would say, when it comes to uh the US and Iran reaching any kind of diplomatic agreement. So, that geopolitical risk didn't go away. In context, I mean, oil prices, Brent is still over $100. So, it shows you that u there is still a geopolitical risk, I would argue maybe in uh in the range of $30 a barrel. But these small fluctuations are perhaps because of the announcement that the US made of reaching a deal with uh with Russia and Russia supplying uh the markets with with diesel. And again, this is not going to happen immediately. This is going to be in uh in April next year. But the markets react to that, >> right? And I'm sure Kepler is really busy right now crunching the numbers on this. Do we have any clarity on what this looks like from a a volume or timing perspective? Yeah, I mean uh in terms of volume, it doesn't add uh so much, Dan. I mean, uh if you're talking about maybe 500,000 metric tons, that's roughly 118 uh,000 barrels per day of of diesel into the market. Just to give you context, uh before all of this uh started uh and before Russia had an export ban, it used to export 500 uh,000 uh barrels per day of diesel into the market. So, it doesn't make a huge uh difference. And I mean, we have to add the fact that Russian refineries remain exposed to uh Ukrainian attacks. And despite uh President Trump announcing yesterday that there's been an energy ceasefire between Ukraine and Russia, we've clearly saw um the Ukrainian President Zilinsk's reaction to that, saying that it's news to him. So uh that's again a question mark on you know how much Russia would be actually able to deliver additional uh supplies to the market. Overall, Dan, I would say that there is a deficit uh a global diesel deficit of around a million barrels a day. Between the Russian additions, let's just assume all of them will be delivered, and the release of EU stocks, maybe uh half of that uh deficit could be filled.