Europe’s strained diesel market is about to come under even more pressure, this time from fuel-guzzling trucks.
That’s the verdict of Lithuania-based Girteka Logistics Uab, Europe’s largest trucking company by ownership. Demand for long-haul, international journeys is growing across the continent, even as a surging oil price drives up diesel values. At the same time, a key trader-metric signaling tight regional supply recently surged to its strongest in more than 13 years.
“Demand for diesel will grow across the market,” said the firm’s marketing chief, Simonas Bartkus. “We do not really have a choice to adjust our consumption based on how expensive or cheap diesel is.”
Europe’s diesel market is already showing signs of stress. The forward curve is signaling low supplies relative to demand, with backwardation—a bullish structure whereby diesel for prompt delivery is more expensive than for later contracts—at its strongest since 2008, excluding days on and immediately around expiry. Stockpiles held in independent storage in the Amsterdam-Rotterdam-Antwerp hub are also at their lowest on a seasonal basis since the same year.
The European Union’s new Mobility Package will also result in more driving and could lead to even more trucks on the road, Bartkus said. The package is designed to encourage competition, make the logistics industry fairer for workers and improve its environmental record.
In 2019, trucking accounted for almost 40% of Europe’s total diesel demand, according to the International Energy Agency.
