European refined product prices rose sharply in early trading on 13 June as market participants reacted to Israel's overnight air and missile strikes on Iran.
At 10:29, non-oxy gasoline barges were assessed 3.5pc higher from the previous close at a volume-weighted average (VWA) of $728/t. Front-month Ice July gasoil futures were trading 6pc higher at $683.75/t.
Israel launched the strikes in the early hours of Friday local time, targeting military infrastructure linked to Iran's nuclear programme. Israeli officials described the operation as an act of self-defence, warning that Iran is now closer than ever to acquiring a nuclear weapon.
The escalation has raised concerns over potential supply disruptions from the Mideast Gulf, a key source of diesel and jet fuel for Europe. Iran could move to close the Strait of Hormuz — a critical chokepoint for global energy flows — which would halt exports of ultra-low sulphur diesel and jet from regional producers such as Kuwait, the UAE and Saudi Arabia. A naval blockade could also restrict LNG shipments from Qatar, tightening gas supply and raising operating costs for European refiners.
Despite the sharp rise in flat prices, some market participants questioned the sustainability of the rally. Front-month gasoil futures had already eased from a peak of $706.50/t reached during Asian trading hours.
A Singapore-based middle distillates trader said many participants were stepping back to "watch the market closely". A European diesel trader also expressed doubt over how long the gains would hold.
