A global surge in diesel is benefiting one of Russia’s key export crudes, with the oil that’s pumped from the nation’s Far East trading at a rare premium to global benchmark Brent.

ESPO, a diesel-rich grade typically favored by the smaller, independent refiners in China, has climbed to a small premium to Brent for cargoes arriving next month, according to traders. That’s a reversal from earlier this year, when it saw sizable discounts amid the market upheaval that followed Russia’s invasion of Ukraine in 2022 as global buying patterns shifted.

Diesel is one of the hotter corners of the global energy market at present as refiners struggle to make enough of the key industrial fuel even as they benefit from healthy profit margins. At the same time, crude-supply curbs imposed by OPEC+ heavyweights Saudi Arabia and Russia aimed at lifting oil prices have curtailed the volume of denser, more-sulfurous barrels that are typically used to produce the diesel that’s vital for industry and transport.

Russia’s ESPO crude for October arrival in China traded at a premium of about 50 cents a barrel to Brent on a delivered basis, said traders, who asked not to be identified. That would be the highest since a price cap was introduced by Western nations, according to Viktor Katona, lead crude analyst at Kpler.

Read more: World Struggles to Make Enough Diesel as Crunch Spreads

“Last time when ESPO was positive to Brent was back in November 2022,” said Katona. While the grade remains a favorite among China’s private processors, state refiners have also increased their purchases, taking four-to-seven more cargoes of October-loading ESPO than usual, he said in an email interview.

For the independent refiners, also known as teapots, ESPO is often blended with sludgier, more sulfurous Iranian barrels, while the bigger state-owned refiners and larger independents — which refrain from buying sanctioned cargoes, including from the Persian Gulf state — compete for that Russian grade, said Jianan Sun, analyst at Energy Aspects Ltd.

Along with ESPO, other crude grades that are rich in middle distillates have also surged. These include Abu Dhabi’s Murban as well as Nigeria’s Bonga. On Friday, Murban’s spot premium rose to the highest since February, while Bonga’s was as much as $2 a barrel more than grades that yield more gasoline, traders said.

--With assistance from Bill Lehane.

(Updates with analyst’s comment in sixth paragraph)