Global refining margin halved due to Russian oil exports
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Since February, the difference between price and cost on the world oil market has decreased by about half. Reuters notes that the decline in margins occurs against the backdrop of record levels of production of petroleum products in China and India.
After the introduction of sanctions and restrictions on Russian oil, its supplies should have been reduced, the agency writes. However, Russia continues to supply oil at a discount, which allows its largest importers – India and China – to increase the volume of processing and export of fuel.
The Indian company Reliance Industries, the operator of the world’s largest oil refinery complex, in its statement of financial results indicated that the reason for the decrease in the margin of gas oil production was the stable supply of Russian diesel fuel. The company also drew attention to the warm winter weather in Europe, which allowed to increase fuel reserves.
European diesel margins fell to their lowest level since February 2022 at about $13.7 a barrel last week, Reuters estimates. In April, the margin of diesel fuel in Asia fell to $14 per barrel (-31%) and reached its lowest level since January last year.
Profits from refining Brent oil at a European refinery fell by 71% to $3.56 per barrel. This is the lowest level since January 2022, the agency notes. Profit from oil refining in Asia fell by about 57% to $2.54 per barrel.
From December 5, 2022, the oil price ceiling at $60 per barrel came into force, from February 5 – for oil products from Russia at $100 and $45 per barrel (for products that are traded at a premium and a discount to oil, respectively). After the introduction of restrictions, most of the Russian resource was redirected to China and India.
Deputy Prime Minister of Russia Alexander Novak saidthat the export of Russian oil to India in 2022 increased by 22 times. According to the International Energy Agency, India and China account for 70% of domestic oil exports. In March, the export of Russian oil and oil products increased by 600 thousand barrels per day.
More details – in the material “Kommersant” “No one canceled the plan for the shaft”.
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