Interactive: Middle East diesel exports to Europe

Over the past 30 years Brazil’s emergence as a global powerhouse in agricultural commodities has been astonishing. Green coffee production has more than doubled since 1990 and sugar cane production has grown about fivefold during the same time. Brazil has gone from barely an afterthought in global soybean production, producing less than 16 million tons, to the world’s largest producer, with nearly 155 million metric tons. This has come from ever-increasing trend yields and a substantial expansion of area under production. The story for corn production is similar. In the 1990/91 crop year Brazilian corn production amounted to 24 million metric tons; today, Brazil will produce more than 130 million metric tons, nearly doubling corn area during this period. Brazil will overtake the US as the world’s largest exporter of corn this year. However, this year is not a result of a one-off supply shock in the US. Large Brazilian production is undercutting US corn in world markets. Brazil overtook the US as the world export leader in soybean ten years ago and has never looked back; we expect the same to happen with corn. Brazil’s competitiveness is mostly related to its vast land availability and low cost of production. The large-scale farming and fast adoption of new technologies allowed it to increase planted area and yields simultaneously. Grain transportation costs in Brazil have been historically much higher than in the United States or Argentina but it has been improving infrastructure in transportation and ports which helped to narrow that difference. All of the above is focused on the supply side. However, Brazil’s rise to prominence in the global oilseed and grain markets also came from filling expanding markets, particularly China’s growing demand. During the last 20 years, soybean exports from Brazil were largely supported by China imports. Strong economic growth, favorable demographics, and fast urbanization helped boost China’s growth and imports of raw commodities. In the animal-feeding sector, the compound annual growth rate of Chinese soybean imports was 7.9% in those 20 years. From 1990-2020, China’s consumption of animal protein grew nearly fivefold. It accounts for roughly half the world’s hogs and nearly 70% of aquaculture production. However, while China’s economy will continue to grow, the rate is likely to be about half of the 10% growth in 1990-2013. Moreover, China’s population shrunk for the first time in 60 years this year, due to declining birth rates. It is hard to imagine these factors will not matter when it comes to food consumption and animal feedstuffs demand. Most of the same supply-side factors that allowed Brazil to gain market share in ag commodity exports during the last three decades are likely to remain; but slower Chinese import growth is expected to result in substantial changes in the global ag trade. While China’s demand growth for raw ag commodities slows, domestic processing will play a significant role during the coming years in Brazil to accommodate the growing supply. The Investment in domestic processing is expected to ramp up given the lower cost of soybeans and corn supplies, and profitable margins. Biofuel demand is likely to continue to expand in Brazil and globally. In fact, the expansion of the renewable diesel industry in the US is exceeding the availability of feedstocks for the first time, and the US is turning a net short soybean oil importer. Brazil is well positioned to address the tight supply and global vegetable oil trade re-allocations to gain market share in the food and fuel segments. This will facilitate increased exports of soy oil and biofuels. At the same time, the meal produced will be a tailwind for the country’s animal feeding sector and is likely to increase exports of meal. This trend will continue with Brazil eventually taking the lead in global soybean products exports. Concurrently, the door is open to pursue leadership in animal protein and biofuels exports. In conclusion the short term economics of soybean and corn production will be challenged by the slowdown in Chinese demand. However, Brazil has significant potential to continue to expand its crop production. Brazil still has more than 100 million acres of pastureland available to expand agricultural production. Production increases provide a huge competitive advantage in any environment, especially if margins are squeezed - good things happen to the low-cost producer. Brazil is currently the food supplier to the world, and if future demand drivers shift from China to biofuels, Brazil is well positioned to morph into the supplier to the world of biofuels. Given soy crushing for biofuels has a symbiotic relationship with animal feeding, this should increase Brazil’s competitiveness in global animal proteins. Get access to the full report here . To learn more about our products, please click here: Food and Agricultural Commodities Economics

The Brent market has undergone a long-awaited evolution this year, with the addition of WTI Midland crude meaning that the complex more accurately than ever captures the fundamentals and pricing of light sweet crude oil in the Atlantic Basin. Since the lifting of the US crude export ban in 2015, WTI Midland has played an increasingly influential role in the pricing of crude being delivered into Europe. North Sea grades such as Forties and Ekofisk, Mediterranean grades such as CPC Blend and Azeri Light and West African grades such as Qua Iboe and Bonny Light have all had to adapt to over one million barrels of light sweet US crude being delivered each day into Europe. In the period since US crude became accessible to the global market, refiners across Europe have benefitted from the increased choice of crude and have adjusted refining slates accordingly and optimized between WTI Midland and its Atlantic Basin competitors. Prior to May 2023 the value of grades within Dated Brent were already being impacted, albeit in a somewhat opaque way, by the steady flow of WTI Midland into Europe. Now the pricing of this established trade flow has been illuminated and made transparent by its incorporation into the Brent complex. Pricing WTI Midland's role in the price of Dated Brent has been much discussed since the grade's introduction for June 2023 cargoes. An examination of assessment data since May 2 clearly demonstrates that WTI Midland has been influential, but not overwhelming. The Platts Dated Brent assessment is defined by the most competitive, or cheapest, grade every day. S&P Global Commodity Insights gives each day in the 10-month ahead assessment range a value for each grade. The final assessment is reflective of any number of the six grades, depending on what is the most competitive valued grade on each day, so a single assessment could be representative of 40% Midland, 40% Forties and 20% Brent, for example. In June Midland was typically the most competitive grade, while in August Forties has most often helped define the benchmark. Liquidity The addition of WTI Midland to Dated Brent has facilitated a large increase in the amount of deliverable crude into Dated Brent, and this has been reflected in a sharp uptick in activity in the Platts Market on Close assessment process. Since May through July, a diverse group of oil majors and traders collectively traded 40 cargoes of WTI Midland comprising a total volume of 28 million barrels of crude. At 16.8 million barrels, July 2023 was the largest month for overall Dated Brent cargo trades since January 2021, and the joint-fourth busiest month on record. Performance tracking As part of an ongoing commitment to upholding the highest standards of integrity and transparency in its Platts Dated Brent MOC process, S&P Global monitored performance on the 17 WTI Midland CIF Rotterdam trades published in the MOC process during the first two months of May and June. This post-deal tracking enables S&P Global to determine the actual performance of the participants in the trades and the validity of their inputs. As part of this, S&P Global reviewed various aspects of performance, including timeliness of nominations and eventual delivery, as well as published parameters of the trades, including quality and volume. Of the 17 trades tracked, two were booked out upon mutual agreement, while all others were physically delivered to buyers. Although all 17 published WTI Midland trades were fully performed upon, two of the cargoes initially provided did not meet the parameters of the published trades. In both cases, full performance was eventually reached, with the entities involved coming to bilateral agreement on final terms. Physical conditions regarding logistics -- which are beyond the control of the seller or buyer -- may result in lateness, quality issues or conditions seen as a deviation from the original wording in the reported trade, for example late delivery/loading. As per methodology, if a transaction becomes difficult, the party causing the issue must seek resolution including alternative loadings, qualities, dates or book outs. S&P Global also reviewed the quality of all cargoes, and the table within the graphic shows the minimum and maximum values of some key quality metrics. Notably, only one cargo out of all tracked exceeded the WTI Midland specification that S&P Global reflects in its assessments. However, all cargoes that were eventually delivered to buyers fully met the specification. The table below shows the transactions that were monitored for performance in May & June: Trade Date Buyer Seller Traded Laycan Loadport Vessel Remarks 5/22/2023 Vitol SA BP Oil International Jun 14-18 Enbridge Ingleside Chrysanthemum Booked Out 5/24/2023 Vitol SA BP Oil International Jun 14-18 Plains Eagle Ford Advantage Award 5/26/2023 Vitol SA Gunvor SA Jun 12-16 Enbridge Ingleside Sparto 5/30/2023 Vitol SA TOTSA Jun 12-16 Seabrook Dubai Charm 6/2/2023 Vitol SA Trafigura PTE LTD Jun 25-29 - - Booked Out 6/5/2023 Vitol SA Gunvor SA Jun 18-22 Enterprise Houston Seaprincess 6/7/2023 Vitol SA TOTSA Jun 29-3 Enterprise Houston Sea Jaguar 6/12/2023 Glencore UK TOTSA Jul 4-8 Seabrook Thyrrhenian Sea 6/13/2023 Trafigura PTE LTD TOTSA Jul 1-5 Buckeye TX Hub Dubai Attraction 6/14/2023 Trafigura PTE LTD Gunvor SA Jul 10-14 Enterprise Houston Nobleway 6/16/2023 BP Oil International TOTSA Jul 4-8 Enterprise Houston STI Connaught 6/16/2023 BP Oil International Gunvor SA Jul 7-11 Enterprise Houston Ghat 6/21/2023 Mercuria SA Gunvor SA Jul 10-14 Seabrook Freedom Glory 6/23/2023 Trafigura PTE LTD BP Oil International Jul 7-9 Enterprise Houston STI Connaught 6/26/2023 Trafigura PTE LTD Gunvor SA Jul 15-19 Energy Transfer Houston Everglades 6/28/2023 Mercuria SA Vitol SA Jul 23-27 Enterprise Houston Aqualegend 6/28/2023 Mercuria SA Vitol SA Jul 23-27 Enterprise Houston Pantelis

Tight refined product markets exacerbated by refinery closures and the Russian war against Ukraine have been a boon for new refineries opening in the Middle East. Daniel Evans, Head of Fuels and Refining for S&P Global Commodity Insights, puts the new supply into context.

Demand for refined products is set to grow as the summer driving season begins. Daniel Evans, Head of Fuels and Refining for S&P Global Commodity Insights, talks about where demand is growing for refined products in both the short, and longer term. Learn more at APPEC 2023 | Singapore | September 4-6

In terms of investments and consolidation, what lies around the corner for global agricultural companies? A conversation with Tom Scott, Vice President, Agribusiness Consulting at S&P Global Commodity Insights. Save the date for Geneva Sugar Conference 2024

Summer travel season is upon us, so what's the outlook for fuel demand in the Americas for the coming months? Naphtha, a key component in gasoline, was recently in short supply but now appears to be in ample supply, and recent S&P Global analyst reports show an anticipated rebound in diesel demand in the second half of 2023. S&P Global Commodity Insights' Sarah Hernandez, Americas light ends manager, discusses recent trends in gasoline, aromatics and distillates with petrochemicals editor Wendy Dulaney and Americas distillates manager Jordan Daniel. We want to hear about your podcast preferences so we can keep improving our shows. Take our podcast survey here and share your thoughts: https://www.surveylegend.com/s/4xyz More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

From humble beginnings, the Middle East's refining industry has grown into a global player, strategically located between major international markets in Asia, Africa and Europe. At a time when refineries in Europe and the US are starved of investment, Middle East operators are going through a dynamic period of expansion to corner new opportunities opening up from changing flows in global trade. LAUNCH REPORT

Does the global trade industry require up to USD 500 million in working capital to maintain its flow? In the DMCC’s report released in the last year, one of the key areas of recommendation is the importance of enhanced trade finance mechanisms to facilitate trade flows globally. Rising interest rates, price volatility and trade pattern changes which contributes to the increased financial costs. With the pandemic allowing for devise of newer trade routes, consolidating the existing once, especially in concern with scarcity of bunker space. Featuring Sanjeev Dutta, Executive Director of Commodities, DMCC. He explores the underlying intricacies required in reducing the strain on trade finance – AI assisted supply chain management, utilizing the world class logistical infrastructure of central hubs such as Dubai and more in this exclusive video interview by S&P Global Commodity Insights. Learn how Dubai’s strategic location can enable reduced carbon -intensive trade in our upcoming Middle East Petroleum & Gas Conference in Dubai, UAE on 22-23 May, 2023. KNOW MORE

Nigerian President Muhammadu Buhari is due to inaugurate the 650,000 b/d refinery on 22 May. But after many years of delays, and with the project running $11 billion over its original $9 billion production cost target, many traders are questioning whether the project is really ready. In this episode of the Platts Oil Markets podcast, S&P Global Commodity Insights oil news reporter Charlie Mitchell and gasoline editor Matthew Tracey-Cook join Joel Hanley to discuss what the market should expect from this colossal refinery that could change Nigeria’s fortunes. Further reading, by speaker Charlie Mitchel: Long-awaited Dangote refinery set to shake up WAF crude, products flows Related price assessments: Gasoline FOB NWE West Africa Cargo - AAKUV00 Crude Oil Cabinda FOB Angola vs Angola Dtd Strip - AAGXT00 Crude Oil Bonny Light FOB Nigeria London vs WAF Dtd Strip - AAGXL00 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

This year, the US, alongside G7 countries, placed a price cap on Russian-grade refined product at $100/b. This marked another set of sanctions designed to shrink Russia's influence on global oil markets. Following the Feb. 5 price cap, disruptions have been seen in both the clean tanker market and the Americas diesel market. In this Oil Markets episode, S&P Global Commodity Insights' shipping, diesel, and Latin America refined products experts Eugenia Romero, Jordan Daniel and Maria Jimenez Moya sit down to discuss the current landscape and recent changes to these trade flows. Related prices Clean USGC-Brazil 38kt ( TCAFQ00 ) ULSD USGC prompt pipeline ( AATGY00 ) ULSD USGC export ( AAXRV00 ) No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

The S&P Global Commodity Insights India CEO Series is a compilation of exclusive interviews by Asia Energy Editor Sambit Mohanty with top government and industry leaders in India's oil and gas sector. Get insights on how those companies are planning to strike a balance between traditional and new businesses at a time when energy transition is changing the industry's landscape, while geopolitical turbulence is throwing up new challenges. State-run Indian Oil Corp will pursue an ambitious refining expansion strategy in coming years amid a strong belief that oil demand is nowhere near its peak, while diversifying into cleaner forms of energy to meet part of the incremental demand growth, its chairman Shrikant Madhav Vaidya told S&P Global Commodity Insights in an exclusive interview. While most of the refining expansion will proceed at a relatively lower carbon footprint, the company has drawn up a growth roadmap that will witness large inroads into petrochemicals, hydrogen and electric mobility. "It is my primary requirement to ensure that energy security, energy access and energy availability are never compromised. For that, we are strengthening the core business since we formally believe that demand for petroleum products will continue to be there in very large volumes in the country for at least a couple of decades," Vaidya said. He added that IOC aimed to lift refining capacity from the current 80 million mt, or 1.6 million b/d, -- nearly one-third of India's total refining capacity of 5.1 million b/d -- to 107 million mt by 2025-26. "All these are approved projects. We are already working at the ground level to make sure that the core is strengthened," Vaidya said. The total current capacity of 1.6 million b/d included the capacity of IOC's wholly-owned subsidiary Chennai Petroleum Corp. Vaidya added that IOC aims to increase the use of electricity generated by renewable energy sources as it expanded its core refining capacity. "For all refinery expansions, we will not be investing in captive power plants, which is the current model for our refineries. We'll be taking green grid power. So that will be one big step for us in ensuring that we achieve net zero operationally by 2046," Vaidya said. Ratnagiri Refinery in a phased manner One of the biggest projects on the drawing board is a mega refinery-cum-petrochemicals complex in the western coast of India, the planned Ratnagiri Refinery, which would have an annual capacity of 60 million mt. It is jointly built by three state-run refiners -- Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp -- while Saudi Aramco and ADNOC have signed initial agreements to take a joint stake in the project. However, the project was facing delays as the land acquisition process has yet to complete. "The Ratnagiri Refinery is very much required. The capacity, what we have thought of, is extremely important for the country to bridge the energy gap," Vaidya said. "But at this point we have taken a conscious call that we will not try and put up the entire 60 million mt capacity at one go. Now, the considered opinion is we will be going in batches of 20 million mt." Currently, he said the ongoing land study was focused on soil and other things associated with the site proposed by the Maharashtra state government. Once the report from Engineers India Ltd is available, IOC and other stakeholders will engage with the state government to finalize details. Highlighting IOC's petrochemical push, Vaidya said the IOC board recently approved setting up the Paradip Petrochemical Complex in the eastern state of Odisha. The mega project was estimated to cost around Indian Rupees 611 billion ($7.39 billion) and will be IOC's biggest investment in a single location. "Today, we are about 5 million mt of petrochemical capacity and we are trying to take that to nearly 15 million mt by 2030. That way our petrochemical intensity index rises from the current 4.6 to 15," Vaidya said. "India is a big importer of petrochemicals but if I make those products myself, it will be a natural hedge against the volatility of crude prices." Room for all With India's economic growth outlook expected to remain robust over the coming years, India would need all forms of energy -- fossil fuels as well as renewables, Vaidya said. Gas and LNG would continue to be a key component of IOC's portfolio and therefore IOC was undertaking capacity expansions at terminals, such as Ennore. In addition, IOC aimed to boost the use of gas in its own refineries. "All my refineries are switching over to gas. Three refineries will be switching over in the next few months, that is Paradip, Barauni and Haldia. They will be taking gas from the Dhamra terminal," Vaidya said. He added that IOC's current renewables footprint was only about 250 MW, but it planned to raise this to 5 GW by 2030, and to 12 GW by 2046. For that, IOC signed strategic partnerships with state-run National Thermal Power Corp and SJVN. For electric mobility, IOC was not taking the lithium-ion battery route since India is a net importer, Vaidya said, adding that IOC had tied up with Israeli company Phinergy for aluminum air batteries. "Field trials are going on for four-wheelers. And once these trials are done, we'll have definitive agreements with four-wheeled vehicle manufacturers and we'll be putting a factory in India for the aluminum air battery," Vaidya said. "We already have a tie-up with Hindalco for the supply of aluminum." The battery-swapping segment was gaining popularity in India and IOC intended to make inroads into the sector in a big way, especially for two-wheelers and three-wheelers, he added. "Green hydrogen is one area where we are going to really push ourselves. I'm a big consumer of hydrogen as it is today because of the hydro desulfurization processes," Vaidya said. "And my intent of entering the green hydrogen phase is, once I give the volumes, I'm sure the prices will come down," he said. IOC has finalized joint ventures with ReNew and L&T to push ahead in that segment. More from the series: India's crude strategy a cushion for both global, domestic prices, says Puri

How have refineries adapted to security of supply issues as a result of Russia/Ukraine? Jet fuel’s post-pandemic demand recovery Carbon intensity of refined products: Platts CO2 offset price assessments In this session of LEF 2023, watch our specialists discuss the same and more. Featuring : Francesco di Salvo, Associate Editorial Director, EMEA Clean Refined Products, S&P Global Commodity Insights Spencer Welch, Oil Markets & Downstream Consulting, S&P Global Commodity Insights Gary Clark, Managing Editor, EMEA Middle Distillates, S&P Global Commodity Insights

The year 2023 did not start as expected: China suddenly dropped all COVID restrictions, boosting sentiment in the global jet market, while diesel prices fell despite the ban on Russian oil product imports into the EU from 5 February. As a result, European jet fuel cracks jumped above diesel, but the spread narrowed by the end of February and the two products are now neck and neck, raising the question of which one will be maximised by refiners, thus tightening the supply of the other in the coming months. In this episode of the Platts Oil Markets Podcast, S&P Global Commodity Insights experts Maxim Kotenev and Gary Clark join Francesco Di Salvo to discuss the outlook for the jet fuel market, its potential impact on other middle distillates and whether a recession is likely to prevent aviation from fully recovering from the pandemic. Related price symbols: Diesel: CIF ARA 10ppm ULSD cargoes #AAVBG00 Jet fuel: CIF NWE jet fuel cargoes #PJAAU00 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

Dave Ernsberger in Conversation with Capt. Salem AlHmoudi, Jasmin Fichte and Martjin Heijboer. With the Fujairah Bunkering & Fuel Oil Forum (FUJCON 2023) less than a month away, get a preview into the topics covered in the one of world’s leading conferences across the global bunkering and shipping industry. Uncover how the maritime industry is gearing up for its first in-person event since the pandemic, as the keynote speakers share their anecdotes on the theme for FUJCON 2023 - "The Maritime Energy Transition & Future Fuels", leading developments on the Fujairah port and more.

What will replace Russian diesel and naphtha flows to Europe after EU sanctions take effect on 5 February? Where will Russian supply go instead? In this episode of the Platts Oil Markets Podcast, S&P Global Commodity Insights editors Rowan Staden-Coats and Vinicius Maffei join Joel Hanley to discuss the expected impact of the upcoming sanctions, what uncertainties remain about replacement supply and whether Russian production will have to be cut after 5 February, and what impact this could have on global supply and prices. Related price symbols: CIF ARA 10ppm ULSD cargoes #AAVBG00 CIF NEW naphtha cargoes #PAAAL00 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).