REFINERY MARGIN TRACKER: Russian crude margins rise on lower prices as refiners shun supply
Planned refining work eases crude demand appeal
Russian crude imports to US and NWE dry up under sanctions
Russia’s military incursion into Ukraine and subsequent sanctions imposed by the United States and other countries caused most refiners to forgo buying Urals crude and CPC Blend, despite higher refining margins due to of the drop in the price of crude, according to an analysis by S&P Global Platts on February 28. .
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As of February 28, actual export volumes of Russian crude from its two main export terminals in Primorsk and Novivorosiisk fell to 661,000 bpd, of which 622,000 bpd is heading to Petromidia’s offshore refinery. Black in Romania. Crude export volumes are significantly lower than the 3.87 million b/d exported on Feb. 27 and 4.8 million b/d on Feb. 24, according to data from commodity tracker Kpler.
For the week ended Feb. 25, the Urals discount to Brent futures widened to $9.02/bbl on average, from $4.42/bbl the week ended Feb. 18 and $2.55 for the week ended Feb. 11, according to Platts price assessments.
As a result, margins increased, with Urals margins for coking and cracking in the Western Mediterranean averaging $12.57/bbl for the week ended Feb. 25, from $9.35/bbl the previous week. , according to margin data from S&P Global Platts Analytics.
Start of maintenance season
Lower prices in the Urals coincide with the start of seasonal maintenance at many refineries, which forces refiners to recall crude imports as they dismantle units for scheduled work.
According to Platts Analytics, global crude distillation unit downtime in February is expected to average 10.5 million bpd, up 516,000 bpd from January, both for planned works and for problems related to the coronavirus.
The United States is expected to be the source of most CDU outages, with 2.5m bpd offline in January and 2.85m bpd offline in February, partly due to the extreme cold that affected major USGC refineries. In March, U.S. CDU downtime is expected to reach 4 million bpd.
Much of the Russian crude imported into the United States is destined for the American Atlantic coast refineries of Monroe Energy and PBF Energy. In the year to February 10, US imports of Russian crude averaged just under 900,000 bpd, according to US Customs data, including around 26,000 bpd of barrels in early January. went to Chevron’s 269,000 bpd refinery in El Segundo, California. .
Kpler data shows the last shipment of CPC Blend bound for the United States left for Wilmington, Delaware, home to the 171,000 bpd Delaware City PBF refinery, on February 14, well before sanctions were imposed. to Russia.
USAC margins for the Urals averaged $16.83/bbl for the week ended Feb. 25, compared to $12.66/bbl for the week ended Feb. 18, and topping crude margins Nigerians and Americans like Bakken.
A spokesperson for PBF Energy was not immediately available for comment.
However, Chevron spokesperson Kelly Russell said in a Feb. 28 email: “With respect to company policy, Chevron does not discuss trade agreements, but as always will comply with all current and applicable laws and regulations We are closely monitoring developments in relation to impacts in Europe.
Urals margins for Northwest European refiners averaged $12.32/bbl for the week ended Feb. 25, according to Platts Analytics data, compared to $9.63/bbl the week former. Kpler data showed that a single shipment of 39,000 barrels was heading to the region, bound for the Neste refinery in Porvoo.
Only one cargo from the Urals was seen set for China: a 564,500-barrel ship bound for Ningbo on February 21, according to Kpler data. Urals margins for China averaged $8.86/bbl for the week ending Feb. 25, compared to $6.05/bbl the previous week, according to data from Platts Analytics.
US Atlantic Coast Refining Margin Averages ($/bbl)
Source: S&P Global Platts Analytics
US Gulf Coast refining margin averages ($/bbl)
Source: S&P Global Platts Analytics
US Midwest refining margin averages ($/bbl)
Source: S&P Global Platts Analytics
US West Coast Refining Margin Averages ($/bbl)
Source: S&P Global Platts Analytics
Average refining margins in Singapore ($/b)
Source: S&P Global Platts Analytics
Average ARA refining margins ($/b)
Source: S&P Global Platts Analytics
Average refining margins in Italy ($/b)
Source: S&P Global Platts Analytics