The Atlantic Basin has seen seasonal highs in diesel flows multiple times in 2024, with this trend continuing into early 2025.
“Last year, high run rates in the US Gulf, steady exports from East of Suez refiners and an increasing volume of Russian barrels reaching the South Atlantic were just some of the factors contributing to ample supplies to net-importers in Europe and Latin America,” Mick Strautmann, market analyst at Vortexa, said in a report.
According to the shiptracking intelligence company, competing export flows in the Atlantic Basin indicated a well supplied market.
Diesel exports from the Middle East experienced a significant shift from West to East in late 2024, resulting in the lowest seasonal availability of diesel barrels from East of Suez for Atlantic Basin importers in over three years, Vortexa said in the report.
Diesel exports from North America reached a five-year seasonal high in the fourth quarter, increasing 18% from the previous year.
This surge was driven by seasonal pricing incentives in Asian markets, which created a gap in supply.
Demand gap
The product market is currently oversupplied.
Europe expects to lose at least 300,000 barrels per day of refining capacity in the second quarter of 2025, adding to the 80,000 barrels a day already lost at the Gunvor Rotterdam refinery last November, according to Strautmann.
Closures in Wesseling and Grangemouth refineries may lead to increased imports of refined products from other regions.
Diesel imports into core European regions, including the European Union, Norway, Switzerland, and the UK, have decreased by 5% in the first quarter of 2025 compared to the same period last year, according to Vortexa data.
The weakness in import levels is due to expectations of permanent refining capacity loss and a surge of unplanned outages in the region.
ARA inventories or refined oil product inventories are well above last year’s levels, indicating that the extra imports in March are intended to cover domestic shortfalls, but are not for immediate consumption.
Demand from Latin America not enough
Vortexa data reveals that Latin American diesel imports have risen 6% in the last four quarters compared to the same period last year.
This is driven by Brazil’s strong agricultural demand, which continues to attract cheaper long-haul Russian diesel shipments.
Additionally, PADD 3 (Petroleum Administration for Defense Districts) diesel is being redirected toward the Panama Canal to meet the increasing demand for power generation in Chile and Ecuador, the agency said.
“Even if the trend continues, this modest growth in imports is likely not enough to absorb excess Atlantic diesel supplies,” Strautmann said.
Further upside potential in this region is limited by increased biodiesel adoption and ongoing fiscal consolidation.
Competition
In the future, PADD 3 diesel exports will continue to compete for market share against Russian barrels and supplies from East of Suez, Strautmann said.
Simultaneously, global attention is focused on the escalating production of two substantial Atlantic Basin refineries.
Nigeria’s Dangote refinery, with a 650,000 barrels a day capacity and presently operating at approximately 60%, is projected to generate 150,000 barrels per day of on-spec diesel/gasoil, with 100,000 barrels per day designated for export, according to Vortexa.
The Dos Bocas refinery, with a capacity of 340,000 barrels per day, aims to produce 120,000 barrels a day of diesel/gasoil for the domestic market, Vortexa added.
“The likely result of further supply coming into the Atlantic Basin market is further downward pressure on diesel cracks until a fresh round of refinery shutdowns tightens the market once again,” Strautmann noted.
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