Europe’s soaring gas prices are making it more cost-effective to burn oil for industrial use, potentially boosting the region’s demand for barrels.

Natural gas surpassed the equivalent of US$100 (HK$780) a barrel on Monday, a two-year high. The price jump raises the prospect of more switching from gas to petroleum products such as diesel — also known as gasoil — wherever that flexibility is available.

“We have already seen increased gas-to-fuel oil switching and gas-to-gasoil is next,” said Eugene Lindell, head of refined products at consultancy FGE. “This is one of the pillars of gasoil strength right now.”

Back in 2022, a surge in the price of gas encouraged switching in Europe and beyond. Expensive gas can also impact refinery operations, potentially adding to the cost of diesel production.