Overview
Barclays has indicated that European diesel refining margins are currently five to six times normal levels.
Pricing and Spreads
Diesel prices at the refinery gate in Europe are close to $170 per barrel, with diesel crack spreads of approximately $80 per barrel. Gasoline prices at the refinery gate exceed $120 per barrel, and gasoline crack spreads are also running well above average.
Drivers of Elevated Margins
Barclays attributes the unusually high margins to a combination of the Hormuz crisis, recent attacks on the Russian refining system, Russia's imposition of a diesel export ban following Ukrainian drone attacks on its refineries, and a curtailment of heavy crude oil production in the Middle East, which reduces diesel yields.
Market Impact
The bank identifies Repsol, Neste, Galp and OMV as the primary equity beneficiaries, noting that integrated oil companies are likely to experience above‑average profitability in their downstream divisions.
Outlook
Barclays does not expect the situation to ease before autumn, forecasting that margins will remain at five to six times normal levels. Low product inventories are described as leaving the energy system fragile, increasing the likelihood that any supply disruption could further amplify margin volatility. The bank also anticipates more rapid micro‑cycles in both crude prices and refining margins.