Diesel Prices Skyrocket Amid European Energy Crisis
The European energy crisis is deepening as diesel prices nearly double since the Middle East conflict began. According to Permutable analysis, ICE gasoil rose from $753 to $1,490 a tonne between February 28 and September 23, while Brent crude increased by 36% over the same period.
The divergence in prices is significant because diesel plays a crucial role in freight, farming, and construction. The European distillate refining margin widened from $28 to $101 a barrel during this time.
Permutable's Global Macro Sentiment Indices track various stages of the shock, including shipping risk, energy prices, inflation, and monetary policy. The shipping-risk measure now stands 3.1 standard deviations above its trailing-year norm for Saudi Arabia, compared to 0.3 for Iran, highlighting concerns about routes used to bypass the Strait of Hormuz.
The Bank of England recently held interest rates at 3.75% by a 6-3 vote and projected UK inflation slightly above 4% in the first quarter of 2027, despite little evidence of material second-round effects so far.