A recent report by Reuters says that global oil supply will exceed demand until mid-2023 when a steep rise in demand is expected, exceeding supply. The IEA’s Oil Market Report, January 2023, predicts record high demand for oil at 101.7 million bpd, an increase of 1.9 million bpd. Almost half of the demand growth for oil will result from China relaxing its regulations on COVID. Jet fuel will be the largest source of growth.

According to IEA, while Russian oil exports to the EU decreased, their diesel exports to EU surged-

Russian oil exports fell by 200 kb/d m-o-m in December to 7.8 mb/d, as crude shipments to the EU declined after the EU crude embargo and G7 price cap came into effect. Russian diesel exports surged to a multi-year high of 1.2 mb/d, of which 720 kb/d was destined for the EU.

From 50,000 ft it appears that the embargo of Russian crude oil into western refineries is somewhat offset by increased Russian diesel exports to EU. The EU is competing with increased imports of Russian diesel.