90-day diesel export ban balances
- This is a follow up brief for the note published on ‘Cross barrel implications of an increasingly likely diesel export ban’.
- From the latest EIA weekly numbers, US distillate exports are at ~1.3-1.6 mbd with CDU runrates at 16.81 mbd and distillates production at 5.16 mbd. For this exercise, let’s assume 1.6 mbd diesel is the baseline exports.
- The distillate stocks are currently at 107.43 mb vs a last-seen max of 163.66 mb back in Jan 2021. This implies there is 56 mb of capacity available in existing diesel storage.
- Assume there is an even further drawdown of the diesel stocks at the announcement of the ban as exporters rush to max out the exports first. Say it drops another 10 mb, so we have 66 mb at the start of the diesel export ban commencement date.
- A 90-day ban would thus result in a max ~700 kbd diesel production that can be stored till tank top. This means USGC refiners have to cut back 1.6 – 0.7 = 0.9 mbd distillates, which translates to a CDU intake of 16.8 * 4.26 / 5.16 = 13.9 mbd, which is 17% runcut from today’s rates.
- If the refineries remain running like today without any shift in yields, the 66 mb of diesel tank ullage will hit tank top within 41 days.
- This of course does not take into any yield shift picture, to shift more distillates into jet and gasoline, so the implied runcuts can be smaller than the 17% to keep diesel feasible throughout a hypothetical 90-day ban scenario.
- Additionally diesel can be stored into gasoline storage tanks as well as modern tanks can be emptied completely with very low risk of contamination. We have then theoretically another 50 mb mogas storage which may not all be totally usable, so let’s say only 20 mb is possible, which allows 200 kbd of incremental diesel production.
- Thus depending on how the diesel export ban/quota is framed, the CDU run cuts could be as low as zero on a blanket ban of 30 days to 17% based on a 90-day export ban.
US distillate exports from EIA
US distillate stocks from EIA
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About the Author
June Goh | Senior Oil Analyst, Sparta Commodities
June is a senior oil market analyst at Sparta specialising in global crude trade flows and refining economics across Asia and Europe. Her analysis is regularly cited by Bloomberg, the Financial Times, and Reuters. With a significant following in the energy community on X (@JuneGoh_Sparta), June’s insights are a staple for institutional traders navigating regional market shifts.
Connect: LinkedIn / X
About Sparta
Sparta is the AI leader for commodity trading, home to Leonidas AI, the first decision-making engine for oil and commodity traders. Backed by USD 42 million in Series B funding led by One Peak, with participation from returning investors FirstMark and Singular, the same investors behind AI leaders like Legora, Dataiku, and Synthesia. From independents to multinationals, the world’s leading commodity teams use Sparta and Leonidas AI to move faster, trade smarter, and stay ahead of the market.
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