Diesel/Gasoil

Diesel and gasoil are middle-distillate refined products used extensively in transportation, heating, and industrial power generation. European gasoil (EN 590) is a key benchmark traded on ICE, while ultra-low sulfur diesel (ULSD) dominates markets with strict emissions regulations.

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EN 590 (10ppm)ULSDD2 Gasoil500ppm SulfurFOBCIFCFRDAP
Quick Facts

Diesel/Gasoil at a Glance

Common Origins
RussiaSaudi ArabiaUnited StatesIndiaSouth Korea
Common Destinations
EuropeBrazilAustraliaNigeriaSingapore
Grades & Specifications
EN 590 (10ppm)ULSDD2 Gasoil500ppm Sulfur
INCOTERMS
FOBCIFCFRDAP
Unit of Measure
Metric Tons
Price Drivers

What Moves Diesel/Gasoil Pricing

Middle distillates price off ICE Gasoil futures (the EU benchmark for 10ppm sulfur diesel) and NYMEX ULSD (NY Harbor heating oil). The diesel crack — gasoil minus Brent — is the key refining margin indicator. Price drivers include winter heating demand, trucking and rail freight activity (a leading indicator of industrial output), refinery turnarounds in NWE and Asia, and sanctions-related flow disruptions (Russian product caps, Red Sea routing). The EN590 winter spec and summer spec switch each impose temporary regional tightness.

Contract Structure

How Diesel/Gasoil Cargoes Are Priced and Settled

Standard CIF NWE clean cargoes are 30,000 metric tons (about 220,000 barrels), reflecting MR tanker capacity. Pricing is gasoil futures plus a CIF Med or CIF NWE differential averaged over a 5-day pricing period. ARA barge trade settles in 1,000-3,000 ton lots against the same benchmark. Letter of credit at sight is the standard payment instrument.

Quality & Disputes

Diesel/Gasoil Specifications and Dispute Practice

EN 590 (10 ppm sulfur), ULSD (15 ppm US), and D2 (500 ppm) are the dominant grades. Disputes turn on cold flow properties (CFPP, cloud point), cetane index, lubricity additives, and total contamination. Off-spec cargoes typically discharge at distress prices or get reblended at terminal — buyer's choice subject to GAFTA-style quality clauses.

Trade Flows

Where Diesel/Gasoil Comes From and Where It Goes

Major exporters: Russia (until 2022 sanctions reshaped flows), Saudi Arabia, India (Reliance Jamnagar, Nayara), South Korea, and the US Gulf. Major importers: Europe (especially after Russia decoupled), Brazil, Australia, West Africa, and Singapore as a regional blending hub. Singapore 10ppm and Singapore 0.5% are the dominant Asian benchmarks.

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More in Oil & Gas

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LPG

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LNG

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