For Buyer

Why is it difficult to find suppliers for DIESEL EN590 and JETFUEL A1

Finding suppliers for diesel EN590 is currently particularly difficult for various reasons. These reasons are due to global geopolitical developments as well as economic and regulatory challenges. Here are the most important factors:

1. Geopolitical tensions and sanctions

• Sanctions against Russia:
  Until recently, Russia was one of the largest suppliers of diesel to Europe. Following the start of the war in Ukraine and the subsequent sanctions imposed by the EU and other Western countries, the import of Russian products, including EN590 diesel, has been severely restricted.

• Companies are now looking for alternative suppliers, which is increasing demand on the remaining markets.
  Russian producers are increasingly supplying Asia, which is further reducing availability in Europe.

• Regional instability:
  Conflicts and political instability in oil-rich regions (e.g. in the Middle East or Africa) have a negative impact on production and export capacities.

2. Limited production capacities

• Refineries and raw material shortages:
  Diesel EN590 must meet strict European standards, which requires special refinery processes. Not all refineries worldwide are designed to produce EN590 quality fuels.

• Global shortages of raw materials, particularly light crude oil, which is needed for diesel production, are making the situation even more difficult.

• Closure of refineries:
  In recent years, several refineries have closed in Europe due to economic pressure, falling demand (during the COVID-19 pandemic) and strict environmental regulations. This has reduced overall production capacity within the EU.

3. Logistical challenges

• Transportation problems:
  The relocation of diesel EN590 procurement from other regions is leading to increased pressure on global logistics.

• Bottlenecks in shipping, port congestion and a lack of tankers or pipelines hinder timely delivery.
  Higher transportation costs make deliveries less economical..

• Regional infrastructure:
  Countries that are potential new suppliers (e.g. in the Middle East or Africa) often do not have sufficient export infrastructure to reliably serve the European market.

4. High demand and competition

• Global demand for diesel:
  Diesel is not only needed in Europe, but worldwide for transportation, industry and agriculture. Demand is growing steadily, particularly in Asia and the USA.

• As a result, competition for the available quantities of EN590 diesel has increased significantly.

• Diversification by country:
  European countries are increasingly trying to find new suppliers, which increases the pressure on international markets. This search for alternatives leads to price increases and scarce availability.

5. Strict quality and environmental regulations

• EN590 standards:
  Diesel EN590 must meet strict requirements for sulphur content, energy efficiency and environmental friendliness. Not all potential suppliers outside Europe are able to meet these standards..
• Sustainability requirements:
  European regulations promote the blending of biofuels with diesel, which places additional requirements on suppliers. Companies must ensure that their supply chains are sustainable and legally compliant, which limits the choice of suitable partners.

6. Economic uncertainties and financing problems

• Exchange rate and financing risks:
  The purchase of diesel on the international market is associated with currency risks and volatile prices.

• Small and medium-sized companies that need diesel are often unable to compete with large market players or make high upfront payments.

• Inflation and cost increases:
  Rising energy and production costs are a burden on both producers and buyers, further reducing the number of economically viable suppliers.

7. Lack of established trade relations

• Lack of experience with new suppliers:
  Due to the exclusion of Russian products, many European companies have to look for new suppliers, often in regions with which they previously had no established trade relations.

• Building trust and logistics structures takes time.

8. Short-term market volatility

• Uncertainty in the demand forecast:
  Fluctuations in demand due to the energy transition and the growing share of electromobility make long-term planning difficult for suppliers and buyers.
• Political uncertainties:
  Constant changes in international trade policy and new sanctions make market developments unpredictable.

Conclusion

The difficulty in finding suppliers for EN590 diesel is a result of several interwoven factors, including geopolitical tensions, market volatility, production restrictions and strict European standards. Companies face the challenge of identifying new sources of supply, diversifying their supply chains while ensuring the commercial viability of their procurement. In the long term, a stronger focus on alternative energies and fuels will be necessary to reduce dependence on diesel EN590.