Asia’s diesel/gasoil exporters are facing growing headwinds in moving barrels to the West. Despite the challenges, Asia's diesel/gasoil balances have been moderated by three key drivers – China’s slowing exports, robust regional demand and newbuild VLCC arbitrage – maintaining regional cracks stable.
Australia's Altona refinery closure is expected to raise the country's refined product imports, with supplies from Exxonmobil's Singapore refineries. MR tanker freight rates to receive support from additional demand for the route.
Australia’s refining sector has been dealt another blow by BP’s recent announcement to shut its Kwinana refinery in Western Australia, and convert it into an import terminal by early next year.
Australia’s Lytton and Geelong refineries are being threatened with permanent shutdown as the compounding impact of the pandemic on oil demand drags on. We postulate the changes on crude and refined products flows if the refineries shut.
Australian heavy sweet crude grades, such as Pyrenees, Van Gigh and Wandoo, have been swooped up by the market ahead of IMO 2020.