Russian refined oil product price cap: No panic over supply yet, analyst says

Ed, let's just jump straight into the diesel situation here because we are going to see a significant volume of diesel coming off the market. I want your take on ultimately who is going to fill that supply gap and what it means for pricing when a diesel is a pretty critical product for Europe and beyond. Yeah, this is a very substantial disruption to really an industry fuel across much of the Eurozone. Russia was the dominant external supplier of diesel to Eurozone economies. So the fact that this embargo is now in place means that there will be a little bit of readjustment and scrambling to get those additional barrels somewhat similar to what we saw at place in the crude oil market last year and also in the natural gas market. So far the actual amount of disruption to supply doesn't seem like it's going to be that substantial in terms of actually Russian needing to cut output substantially. It does look that they have been able to find new markets or be able to expand their diesel exports to kind of historical current markets, places like Turkey, other bits of North Africa, and then also sending product out to markets in Asia.

All of it means is that those shipments will take longer. So there's going to be additional costs there. This is not necessarily positive. This is not a positive indicator in terms of the direction for prices going downward and easing the burden of energy prices on consumers. But in terms of actually disrupting supply, it doesn't look like we're in any kind of panic stations just yet. We could see a displacement of Middle East cargoes of diesel that could have gone into Asia heading into the European market, potentially expanding their foot presence or their foothold there. So for instance, exports of Saudi diesel could see a big uptick in response to the embargo on Russian diesel.

Capital Connection, CNBC