Forward diesel east-west price spreads rally to more than three-year highs as supply concerns bite
“The trajectory for both diesel and jet though now hinges on the scale and duration of escalation,” said Sparta Commodities James Noel Beswick in a client note dated March 2.
Reuters, March 4, 2026 – Forward diesel east-west spreads have rallied to more than three year highs, with the April EFS widening to around -$135/mt, as traders price in growing supply risks linked to escalating tensions in the Middle East and potential disruption to flows through the Strait of Hormuz. The waterway handled more than 400 kb/d of diesel last year, with roughly a third moving to Europe, making it a key route for global distillate balances. Despite the stronger spreads, no east-west arbitrage cargoes have been fixed yet, suggesting the trade remains uneconomic or too risky for shippers. As Sparta Commodities analyst James Noel-Beswick noted, the outlook for both diesel and jet will depend on “the scale and duration of escalation.”
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