June 13, 2024
Suit 25, Mangal Plaza, Nouakchott Street, Wuse Zone 1, Abuja- Nigeria.
OIL & GAS

Asian Refiners Set to Close 2024 Diesel Export Deals at Lower Premiums

Key Asian refiners, including South Korea’s top refiners GS Caltex and SK Energy, are expected to finalize 2024 diesel export deals at lower premiums compared to the previous year.

According to Reuters, industry sources suggest that premiums for 10ppm sulfur diesel are likely to be in the range of 50 to 60 cents per barrel to Singapore quotes. This marks a decrease from the premiums of $1 to $1.50 per barrel observed for this year’s supply.

Taiwan’s Formosa Petrochemical Corp (FPCC) recently sold at least one 750,000-barrel cargo per month to Vitol at a premium of between 80 cents and $1 a barrel last month, indicating the trend of lower premiums.

The shift is attributed to a projected increase in global supply in 2024 amid a slowdown in global demand growth. The decline in diesel premiums may impact refining profits for major fuel exporters, with diesel accounting for a significant portion of refined fuel exports from the region.

“Middle Eastern exports are rising for next (few) years and that is the bearish driver in the market,” said FPCC company spokesperson KY Lin.

Traders are cautious about committing to higher premiums for term supply, considering the average premium in 2023 was below $1.50 a barrel.

Asia and the Middle East collectively contribute significantly to the world’s diesel supplies, making these adjustments noteworthy for the industry.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.