Kuwait's Al-Zour Refinery has started operations at one of its CDUs a few days ago. The 615 kbd refinery is one of the largest globally, representing the most significant addition to global refining capacity in years and the largest addition until Nigeria’s Dangote plant eventually starts up later this decade.
The fallout from the war in Ukraine is causing supply tightness across a number of commodities. Ammonia might be the most impacted of all.
As Russian crude oil exports could decrease by 1.5 mbd from next month onwards according to our estimates, we look to what extent US shale production could offset the impact thanks to its business model with high flexibility and reactivity.
A few laden Yamal LNG-chartered vessels that were earlier signalling their arrival at ports in France and Spain are waiting for orders to sail to new destinations suggesting a pre-emptive move by Yamal LNG ahead of a possible ban by the EU on Russian ships entering its ports.
The Russian war in Ukraine is in its seventh day and financial sanctions on Russian individuals and banks are set to cripple the financial sector. Energy exports have not been the target of sanctions and even though the effect has made buyers and shippers wary, trade volumes have been unmoved so far as current loadings would have traded and had vessels fixed before the invasion. But, with Urals hitting a new record discount to Brent, finding buyers over the coming weeks is set to become increasingly difficult.
Russia’s Sovcomflot-owned 172,600 m3 Christophe de Margerie ice-class LNG carrier has diverted away from the UK and is sailing to France’s 8 mtpa Montoir LNG receiving facility, following the UK’s decision to ban ships with Russian connections entry to its ports.
European Gasoil imports have fallen to an 11-month low, despite this being the peak demand season. A mild winter in most of the region has combined with faltering demand recovery, meaning just 7.5 million tonnes were imported in January 2022.
While a full ban on Russian oil exports would undoubtedly have a severe impact on the Russian economy, it would also cause widespread disruption to the global oil market. Europe would be the worst affected, relying on both Russian crude and product to a large extent.
In this update Alex Booth, Kpler's Head of Research comments on the developments through the day in Ukraine and the potential market and geopolitical ramifications.