Atlantic Basin gasoline supplies on the rise amid shrinking destination outlets
Atlantic Basin gasoline/blending component seaborne loadings are growing fast. The transatlantic pull supported by strong gasoline margins for a brief period in May is over amid rising inventories and soft demand, while new refining capacity in the region is able to largely fill regional import requirements (Dangote). Market fundamentals have worked together to push European gasoline margins down to a three month low on June 17 (Argus Media).
Gasoline/blending component loadings started slow at the beginning of the year due to extended refinery outages in PADD 3, East Coast Canada, Europe and the South Atlantic as refineries witnessed turnarounds and unplanned events dragging out outages in the Atlantic Basin into May. The outages drove Atlantic Basin gasoline/blending component loadings down 7% in Jan-May 2025 compared to the same period last year.
This supply contraction lent support to gasoline margins, however with outages now coming to an end, we can currently see June 1-17 data reflecting a 20% m-o-m increase in Atlantic Basin gasoline and blending component loadings, with the y-o-y increase standing at 18%.
With the transatlantic gasoline arb shut into PADD 1, gasoline inventories will likely continue to pile up in Europe, already standing at +10% y-o-y in ARA for May (Argus Media) and +4% y-o-y in PADD 1 (EIA, June 18). Additionally, refinery run rates are currently strong in all US PADDs. And despite a few outages in PADD 3 gasoline making units (FCC’s), including at Marathon Oil Texas City (631kbd), PADD 3 gasoline/blending component seaborne exports are surging 13% higher y-o-y in June based on data from days 1-17.
Meanwhile, West Africa gasoline/blending component import demand fell by 20% in May y-o-y and is heading for a historical low in June, with only 261kbd arriving for days June 1-17. This is largely due to the RFCC at the Dangote refinery returning from an unplanned outage in Q2. And despite East Coast Mexico import demand for gasoline holding steady around 250kbd since February, average volumes imported from Jan-May 2025 compared to the previous year are down by 20% coinciding with relatively raised rates of gasoline production (3% higher from Jan-April 2025 y-o-y) (Pemex).
Demand outlook
The major factor pressuring gasoline demand is widely thought to be the increased usage of Electric Vehicles (EVs) in the larger Atlantic Basin gasoline demand centers.
Despite the estimate that global oil displacement caused by EVs is expected to reach 2.5mbpd by 2025 (UBS), it is likely other factors in the USA that are having a bigger impact toward a degradation of motor fuel demand such as fuel efficiency in gasoline vehicles.
Marketwatch cites fuel economy of new vehicles in the USA has increased by 35% since 2004, significantly reducing gasoline consumption despite vehicle miles travelled in April 2025 showing a 1.5% rise y-o-y and an overall increasing trend (Federal Reserve) since the lows of COVID (currently only 11% lower than pre Covid peak). According to the Petroleum Economist, average fuel efficiency for passenger cars is set to rise to 53.40 miles per gallon this year compared with 27.50 miles per gallon in 2010 further squeezing gasoline consumption. These factors are gradually putting downward pressure on import demand.
Meanwhile European demand, a bright spot for ARA’s gasoline overhang in previous summers, is looking tepid. EVs look to be growing and making up a larger portion of new car sales in Europe’s largest car market Germany. New EV registrations in the country rose by 45% y-o-y , possibly due to a recent new EU law incentivising low CO2-emissions car sales to companies (Argus Media/KBA).
For now, the best European refineries can do is take advantage of relatively cheap high octane blending components and have stocks ready for any supply disruptions that could trigger import demand to the major demand centers. The 2025 Atlantic hurricane season is predicting a 60% chance of an above-normal season (National Oceanic and Atmospheric Association) and, of course, ongoing negotiations between Dangote and the national government could mean import demand returns for brief and sporadic periods of time.
