China on May 14 announced that it will implement a consumption tax on mixed aromatics, light cycle oil and bitumen blend from June 12 in…
May 31, 2021
China on May 14 announced that it will implement a consumption tax on mixed aromatics, light cycle oil and bitumen blend from June 12 in an effort to close a loophole in its tax system. This tax is expected to have repercussions not only in the domestic market, but also in the regional refined products market and crude markets.
Mixed aromatics and light cycle oil or LCO are used as blend stocks in gasoline and gasoil, and bitumen blend is used as a feedstock by independent refiners.
S&P Global Platts oil market editors and analysts Mriganka Jaipuriyar, Grace Lee, Oceana Zhou and Su Yeen Cheong examine how the tax is expected to alter domestic supply-demand balances, regional trade flows, and types of crudes imported into China.
China’s surprise consumption tax move creates room for additional crude inflows
China’s Apr light cycle oil imports hit record high 2 mil mt ahead of new tax
China’s consumption tax seen hurting bitumen blend imports in H2
Jun 10, 2021
Gasoline imports into the US Atlantic Coast have surged to record highs in recent months.
Andrea Salazar and Anna Trier of S&P Global Platts look at what has been driving the flurry of imports — from the recent Colonial Pipeline cyberattack to a winter storm that impacted the Gulf Coast — and how long that is expected to last.
Jun 11, 2021
The airline industry is at a “critical” point in building a credible green energy path, said Willie Walsh, CEO of the International Air Transport Association, but believes commitments from key players will contribute to an upsurge in sustainable aviation fuel production in the next decade.
“I’m optimistic that when we go into that period between 2030 and 2040 that we will see a significant ramp up being SAF production,” he told S&P Global Platts in an interview June 9, noting that economies of scale will drive the price down and make biojet more competitive with conventional jet fuel.
Right now using more SAF is an expensive proposition. S&P Global Platts assessed jet FOB NWE cargoes at $601.75/mt June 10, compared with SAF ex-wharf NWE at $2,387.25/mt. The spread between the two has grown steadily from $1,348.23/mt April 28 to $1,785.50 June 10.
“It has been somewhat frustrating to see the low volumes of production that we’ve witnessed in recent years, and we’re clearly in this catch 22 situation,” Walsh said. “We need greater investment in SAF, we need greater production to drive down the unit cost and clearly we’ll get much greater uptake if the unit cost is lower,” he said.
Airlines are struggling as a result of the coronavirus pandemic and this makes it difficult for them to pay the premium for SAF but boosting demand for the green fuel is important, Walsh said.
“We have to be able to demonstrate that there is a credible path to a lower carbon airline industry, and SAF is one of the key elements in getting there,” he said.
Airlines are putting their money where their mouths are and are investing in SAF production. International Airlines Group, which owns airlines including British Airways, Iberia and Air Lingus, and of which Walsh was formerly CEO, announced in April it will power 10% of its flights with SAF by 2030.
BA is collaborating with fuel technology firm Velocys to manufacture SAF from household and commercial waste.
Ryanair also said in April it will power 12.5% of its flights with SAF by 2030.
This would be building from a low base.
On a global scale, assuming facilities with SAF production capabilities shift to producing them entirely, SAF volumes could amount to around 1-2% of total global jet fuel demand, according to Platts Analytics.
This is supposing that this production capacity would be available for SAF and not for other types of biofuel. With the rest of the transport industry also increasingly using and mandating biofuel use SAF must compete for production capacity with transport fuels like renewable diesel.
SAF and energy efficiency are key weapons in the aviation industry’s somewhat limited arsenal against climate change, at least for now, according to market watchers.
There is ongoing development in aircraft efficiencies but radical technological solutions to decarbonizing aviation will not come until around 2035, for example with Airbus targeting a hydrogen-powered aircraft by 2035, Walsh said.
Electric and other alternatively-fueled aircraft have limited scope to limit aviation’s contribution to greenhouse gas emissions as current technological prospects indicate such aircraft will only be able to power short-haul flights, sources said.
“About 80% of the CO2 that the industry produces today is from flights of greater than 1,500 km,” Walsh said.
Nevertheless, there is cause for optimism. “We are looking at an industry that has a great track record when it comes to technology. I’d say the next five years are going to be critical in being able to demonstrate to those who are critical of our industry that we have a credible path to a lower carbon industry,” Walsh said.
Fragmentation in the aviation sector means it is ripe for consolidation but with balance sheets weak now as a result of the coronavirus pandemic significant M&A activity is unlikely for a couple of years, Walsh said.
“It would be a brave CEO that would spend the limited cash that they have available to acquire another airline,” he said.
The industry is too fragmented and the traditional poor profitability is not sustainable. “Consolidation is part of the solution but not the [whole] solution and I would expect to see consolidation starting again in a couple of years’ time,” he said.
After slumping to an eight-year low in 2020, global oil demand is expected to rebound by 5.5 million b/d in 2021, according to S&P Global…
May 24, 2021
After slumping to an eight-year low in 2020, global oil demand is expected to rebound by 5.5 million b/d in 2021, according to S&P Global Platts Analytics.
Despite fears over growing COVID-19 infections in parts of Asia and the risk of new variants thwarting progress on vaccinations, the recovery could bring oil demand close to pre-COVID-19 levels by year-end. Market watchers are cautiously optimistic that India, the world’s number three oil consumer, will push back its COVID-19 crisis during the second half of the year.
In the West, a summer US gasoline demand boost is set to outstrip seasonal norms but air travel continues to lag the global recovery. By year-end, global jet demand may still be 1 million b/d below pre-COVID-19 levels.
Feb 01, 2021
US gasoline demand has been picking up as the country opens up from the coronavirus lockdowns. Gasoline inventories are tight, especially on the US Atlantic…
May 25, 2021
US gasoline demand has been picking up as the country opens up from the coronavirus lockdowns.
Gasoline inventories are tight, especially on the US Atlantic Coast following the recent Colonial Pipeline outage, but refiners are ramping up runs, lured by strong margins.
S&P Global Platts Director of Americas Oil News Jeff Mower, Senior Editor Janet McGurty and Futures Editor Chris van Moessner discuss what is in store for this summer’s gasoline markets.
Building a roadmap to success in a time of declining demand for refineries What next steps does refining need to take as it comes out…
Sep 22, 2021
What next steps does refining need to take as it comes out of the demand dip caused by the covid-19 pandemic? So many opportunities in the market today rely on knowing how and when demand will recover – for refiners, looking to the next steps could be the difference between long term success and failure.
The S&P Global Platts 15th Annual European Refining Summit brings together the top thought-leaders in the space to analyse market trends and predict when the refining industry will get back on its feet. With deep-dives into demand dynamics for downstream markets, in-depth analysis of regulations impacting refiners and insightful looks at what sustainability measures will help companies thrive in this turbulent time.
Join more than 100 industry professionals in-person this 22 September in Brussels – with face to face meetings being a key tool for attendees to uncover trends impacting the industry today, this event is the best chance you have to connect with fellow professionals.
A flurry of talks involving the US, Iran and European nations could revive the nuclear deal and lift sanctions that had more than halved Iranian…
May 17, 2021
A flurry of talks involving the US, Iran and European nations could revive the nuclear deal and lift sanctions that had more than halved Iranian oil production, though significant obstacles remain.
Iran pumped as much as 4.8 million b/d of crude and condensate before the sanctions were reimposed in 2018, and S&P Global Platts Analytics expects an agreement could bring full sanctions relief by Q4 2021, which could see volumes ramp up 850,000 b/d by December to 3.55 million b/d, with further gains in 2022.
Read more about it: Sanctions relief for Iran would pressure rival heavy crude, condensate producers
The US and Iran are entering a sixth round of indirect talks in Vienna aimed at restarting the 2015 nuclear deal. S&P Global Platts Analytics…
Jun 07, 2021
The US and Iran are entering a sixth round of indirect talks in Vienna aimed at restarting the 2015 nuclear deal.
S&P Global Platts Analytics still expects the sides to reach a deal in the coming months, with the Biden administration removing sanctions on Iran’s oil, petrochemical, shipping and other sectors by September. This sanctions relief would allow Iran to boost crude and condensate exports to 1.5 million b/d by December, from 600,000 b/d in May.
We spoke with Henry Rome, senior analyst at the Eurasia Group, about the main sticking points to reaching a deal. He also walks through some of the domestic political dynamics in Tehran and Washington and gives his prediction for when higher Iranian oil exports will start to flow.
Stick around after the interview for the Market Minute, a look at near-term oil market drivers.
While the May 7 outage of the Colonial Pipeline prompted fears of fuel shortages on the US Atlantic Coast, it also led to talk of…
May 20, 2021
While the May 7 outage of the Colonial Pipeline prompted fears of fuel shortages on the US Atlantic Coast, it also led to talk of extra gasoline and diesel moving from Europe. But with COVID restrictions easing on both sides of the Atlantic, there are longer-term drivers at play.
In this episode of the Oil Markets Podcast, S&P Global Platts reporters Rowan Staden-Coats and Allen Reed discuss with Joel Hanley the latest trends on these vital road fuel markets.
In this week’s highlights, oil recovery is in the spotlight at industry events; European gas markets remain buoyant as buyers look to secure volumes to…
Jun 14, 2021
In this week’s highlights, oil recovery is in the spotlight at industry events; European gas markets remain buoyant as buyers look to secure volumes to fill storage; and eyes are on Germany’s energy transition with the expected launch…