Diesel Prices Surge Amid Global Oil Market Turmoil, Serbia Eyes Secure Imports

Global oil markets are facing increasing uncertainty, marked by a sharp rise in crude oil prices and persistently high prices for refined products like diesel for the past three months. Tomislav Mićović, Secretary General of the Serbian Oil Companies Association, told RTS that a confluence of problems, not solely the Strait of Hormuz, is causing disruptions. He stressed the critical need for Serbia to ensure a secure supply of oil derivatives.

Mićović highlighted the alarming "crack spread", the difference between the price of crude oil and diesel, which has exceeded $100, a significant jump from around $90 in 2022. In normal circumstances, this spread ranges from $20 to $40 per barrel, making the current fivefold increase a clear indicator of market turmoil. "Refineries are achieving exceptionally high margins," Mićović noted, explaining that this situation is felt globally, including in Serbia.

Serbia must navigate a delicate path, aiming to protect its market from exorbitant prices without jeopardizing the import of essential oil derivatives. Mićović pointed out that Serbia's reliance on imports of finished products is substantial, especially as NIS, the national oil company, is expected to increase its refining levels soon. However, the cost of imports currently rivals retail fuel prices, a situation he described as unsustainable.

Mićović elaborated on the accumulating global issues. Beyond the Strait of Hormuz, which is reportedly missing about 20 million barrels per day from supply, Russian refineries have been removed from the supply chains of other nations. Attacks on refineries in Saudi Arabia and Libya, record-low U.S. inventories, and agricultural problems due to drought further compound the situation. These widespread issues are creating significant inflationary pressure worldwide, with many European countries already experiencing diesel and gasoline prices around two euros per liter.