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Asia’s Diesel Margins Shrinking on Supply Glut

OIL PRODUCTS
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Asia’s oil refiners are facing a squeeze on diesel margins amid rising imports from the Middle East, according to Bloomberg.

  • Diesel exports from the Middle East are on track for a record in May. Most will head to Europe, but any spare cargoes will likely head East, adding further length to regional supply.
  • Diesel cracks in Asia are now nearing a 12-month low, prompting some refiners to adjust production and maximise jet fuel yields instead.
  • Asian refiners are already facing weak demand which is forcing some to lower operating rates.
  • Additional flows to Europe from the Middle East increase competition for India’s refiners, which had been covering the deficit left after Russian diesel supplies were cut-off.
  • Any displaced Indian diesel cargoes could also head to East Asia, exacerbating the supply glut.
  • The diesel surplus in Asia and the Middle East is around 270k b/d above 2023 levels, FGE said.

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Asia’s oil refiners are facing a squeeze on diesel margins amid rising imports from the Middle East, according to Bloomberg.

  • Diesel exports from the Middle East are on track for a record in May. Most will head to Europe, but any spare cargoes will likely head East, adding further length to regional supply.
  • Diesel cracks in Asia are now nearing a 12-month low, prompting some refiners to adjust production and maximise jet fuel yields instead.
  • Asian refiners are already facing weak demand which is forcing some to lower operating rates.
  • Additional flows to Europe from the Middle East increase competition for India’s refiners, which had been covering the deficit left after Russian diesel supplies were cut-off.
  • Any displaced Indian diesel cargoes could also head to East Asia, exacerbating the supply glut.
  • The diesel surplus in Asia and the Middle East is around 270k b/d above 2023 levels, FGE said.

Keep reading...Show less