Latest EU sanctions against Russia pushing up diesel prices - TotalEnergies CEO

MOSCOW. July 24 (Interfax) - The latest European Union sanctions banning imports of petroleum products processed from Russian oil are pushing up diesel prices, TotalEnergies CEO Patrick Pouyanne said during a conference call.

Pouyanne said that it is better to process diesel from heavy crude. Diesel has become harder to process with the departure of Russian oil and the influx of lighter feedstock, particularly U.S. shale oil. Pouyanne also said that there is a shortage of diesel in Europe, and it must import the fuel.

He said that he could clearly see a force driving diesel fuel up on the market, explaining the relatively high profit margins in oil refining. He also said that TotalEnergies expected high diesel prices to become a persistent feature on the global market, due in particular to the situation with Russian oil.

"The sources of diesels are now coming from the Middle East or from US refineries further away, so it has increased the cost," he said, referring to Europe's ban on imports of Russian petroleum products, effective from early 2023, and the more recent diesel shortages in the continent.

Pouyanne said that he thought the EU's latest decision to ban imports from oil refineries inside or outside of Russia was aimed at several refineries in India or Turkey and would exacerbate the diesel shortage in Europe, bringing about a further rise in diesel prices.

He also said that fundamental factors were complicating diesel production and causing prices to rise, such as the fact that the range of oil available on the market is becoming ever lighter due to shale oil and natural gas liquids.

He said that people seemed to have underestimated the EU's decision to ban imports from refineries which used Russian oil and that he considered this to be about more than just high-margin business. "There is something, for me, more structural there," he said.