EU diesel price cap to limit Moscow’s choice of buyers, including in Asia |
LONDON, 27 january (Reuters) – The E.U Russia to diesel offer his price ceiling may be high enough to allow Moscow to continue exporting the fuel, but cheap in practice Russia may discourage large Asian buyers accustomed to buying raw materials from processing themselves. , analysts say.
EU officials said that Europe Commission to the EU Russia to diesel 100 dollars/barrel price limit, and 45 per barrel for discounted products such as fuel oil dollars to set the limit offer does.
The Feb. 5 price caps and an EU ban on imports of Russian oil products are part of a series of measures the West has used to reduce Russia’s export earnings and limit Moscow’s ability to finance its war in Ukraine nearly a year ago.
Analysts say these measures are already working and the price cap is expected to further increase Russia’s budget deficit.
Saxo Bank analyst Ole may find it difficult to offload Russian diesel to other buyers, as major customers in Asia are more interested in feeding their refineries with highly discounted Russian crude, which can then be converted into fuel products sold at global market prices. Hansen said.
Other analysts say that offer The price limit is quite close to the current prices of oil products, which theoretically will allow Moscow to continue exporting to some regions.
JP Morgan analysts, “The assumption included in our analysis is that the product price ceiling is set at a high enough level to allow Russian exports to continue.” Bank attributes the recent rise in oil prices to volatility in oil product markets.
Intercontinental exchange Europe 965.25 a tonne in the diesel futures contract on Thursday dollars or closed at the level of approximately 130 dollars/barrel.
Once the price of diesel is taken into account relative to crude oil, the proposed diesel price ceiling is roughly in line with the $60/barrel price cap imposed by the G7 on Russian crude oil exports, a European trader said.
According to Reuters estimates, the theoretical profit margin for a refinery to convert a barrel of crude oil into diesel is just over $40 a barrel.
Europe has already come a long way in diversifying its diesel imports and has seen record volumes in recent months, particularly from the Middle East and Asia Pacific region. However, in recent months, on the eve of the price limit and import ban on February 5, Russian imports have also increased.
Consultancy Energy Aspects january revised upward its forecast for European diesel stockpiles for the end of May, but said that some of the EU embargoed storage operators are of Russian originhand is expected to create logistical challenges as it struggles to separate products.
“(Our) polls show that some importers are already struggling to sell Russian diesel from storage, face additional requirements to separate Russian diesel from non-Russian diesel in storage tanks to prevent pollution, and in some EU markets customs they see delays in the formalization”. he said.
New processing power to be launched later in the year is expected to help balance the market.
“We expect volatility in distillate cracks and prices in 1Q23 around the implementation of the embargo, but we see market imbalances clearing and the risk premium in distillates collapsing in 1Q23,” JP Morgan said.
Edited by Elaine Hardcastle
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2023-01-28 02:29:43
Source – reuters
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