US midcon diesel stocks lowest since 2017

Market: Agriculture, Oil products
30/05/25

US midcontinent diesel inventories sank to a 90-month low last week as farmers wrap-up planting the biggest corn crop in 12 years.

Midcontinent diesel stocks in the week ended 23 May fell to 22.9mn bl, the lowest since 17 November 2017, according to US Energy Information Administration (EIA) data.

Diesel inventories fell by 3.4pc from the prior week and have been declining since the week ended 21 February when volumes were at 34mn bl, a 33pc decline over that span.

Regional diesel production fell last week by 2pc to 1.16mn b/d following three consecutive weekly gains.

Despite low stocks, Group Three ultra-low sulphur diesel (ULSD) prices continue to fall, indicating weakening demand. Prices closed at $2.01/USG on 29 May, the lowest since 7 May and 31¢/USG lower than a year earlier. Cash prices peaked on 14 May at $2.23/USG and have steadily declined since then.

US farmers are expected to plant 95.3mn acres of corn this spring, up by 5.2pc from last year, the US Department of Agriculture (USDA) predicted in its 31 March prospective planting report. That would be the highest corn acreage since 2013.

US corn planting, a proxy for diesel demand, was 87pc complete in the week ended 25 May, 2 percentage points ahead of the five-year average pace, according to the USDA. Missouri was 94pc complete, ahead of last year's 88pc pace. Corn planting in Illinois and North Dakota also were outpacing last year with 82pc and 78pc completed, respectively.

In Chicago, diesel prices have climbed in the past two sessions, even as spring planting winds down.

West Shore/ Badger pipeline ULSD was at $1.98/USG on 29 May, the highest since 23 May, while Buckeye Complex and Wolverine pipeline ULSD closed at $2/USG, also the highest since 23 May. Prices for West Shore/Badger ULSD were down by 19¢/USG from a year earlier, while Buckeye Complex and Wolverine ULSD were down on the year by 17¢/USG.

By Carrie Carter

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23/06/25

US refiners boost jet production despite clouds

Houston, 23 June (Argus) — Some US refiners are boosting jet fuel production despite tariff-related economic uncertainties that could affect travel demand. Marathon Petroleum, one of the largest US independent refiners, is spending millions to increase jet fuel capacity at its 253,000 b/d Robinson refinery in Illinois. The project will increase the refinery's flexibility to optimise jet output to meet growing demand, chief executive Maryann Mannen says. The company plans to spend $150mn on the project this year and another $50mn in 2026. Marathon would not disclose the planned jet capacity at the refinery but says the project will be ready by the end of 2026. Another independent refiner, CVR Energy, is increasing jet capacity at its Coffeyville, Kansas, refinery. The company is installing piping and revamping storage tanks at the 132,000 b/d facility to enable 9,000 b/d of jet output by the end of the third quarter, chief executive David Lamp says. Jet production is not subject to a Renewable Volume Obligation, which means that CVR would not need to blend biofuels into it or purchase renewable identification number (RIN) credits as it would if producing diesel. Shifting production from diesel to jet will reduce CVR's annual RINs requirements, Lamp says. At the same time, the opportunity to sell products to markets further west, where two major refineries are set to close, will continue to grow over the next few years, with jet being an important part of the mix, he says. Phillips 66 plans to shut its 139,000 b/d Los Angeles refinery by October, while independent Valero aims to close or repurpose its 145,000 b/d Benicia, California, refinery by April 2026. CVR has the capability to move products from the midcontinent to California but would need to weigh the potential benefits against the political, regulatory and cost environment in the state and, as a result, may favour other locations, it tells Argus . CVR at present produces jet at its 74,500 b/d Wynnewood, Oklahoma, refinery, shipping it primarily by truck or pipeline to midcontinent locations, but it can also move jet by rail. Another independent, Delek, has upgraded its 83,000 b/d El Dorado, Arkansas, refinery to produce jet as part of a plan to boost profitability. The company did not disclose how much jet the refinery can produce. The investments come after US refineries produced a record share of jet in 2024, reflecting higher demand relative to other transport fuels, according to the EIA. The EIA in its most recent Short-Term Energy Outlook forecasts that US jet demand will average 1.71mn b/d in 2025 and 1.73mn b/d in 2026, up from 1.7mn b/d last year. But US airlines are signalling an uncertain outlook for jet demand, with most withdrawing full-year 2025 financial guidance when reporting first-quarter earnings, as President Donald Trump's evolving tariff plans have made it difficult to predict how travel activity will develop. SAF conduct Refiners nevertheless appear bullish on aviation fuels, including renewables. Specialty refiner Calumet will expand sustainable aviation fuel (SAF) output at its Montana plant sooner than expected — reaching 120mn-150mn USG/yr by the second quarter of 2026, with plans to boost capacity to 300mn USG/yr by 2028. SAF margins have remained "stable and attractive", as the introduction of national mandates around the world compliment an already growing base of voluntary demand, chief executive Todd Borgmann says. US independent Par Pacific's planned $90mn renewable fuels facility at its 94,000 b/d Kapolei, Hawaii, refinery, is near completion. The project will produce SAF and other products, and is expected to start up in the second half of 2025. By Eunice Bridges US jet fuel demand Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Russia condemns US strikes, offers Iran support

23/06/25

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23/06/25

Russia condemns US strikes, offers Iran support

London, 23 June (Argus) — Russia has condemned US airstrikes on Iranian nuclear facilities but said they will not affect Moscow's dialogue with Washington. "This is an absolutely unprovoked aggression against Iran. It has no basis or justification," state news agency Tass quoted President Vladimir Putin as saying during a meeting in Moscow with Iranian foreign minister Abbas Araqchi. Earlier today, Kremlin spokesperson Dmitry Peskov also criticised the strikes and expressed "deep regret" over the escalating conflict in the Middle East. "There has been an increase in the number of participants in this conflict, a new round of escalation of tensions in the region. And of course, we condemn this and express deep regret in this regard," Peskov said, according to Tass. Despite the tensions, Peskov said the US strikes would not affect Russia's bilateral dialogue with Washington, describing the two processes as "independent". He also raised concerns about potential radiation risks from the attacks. "We need to find out what happened to these nuclear facilities and whether there is a radiation hazard," he said, while noting that the UN nuclear watchdog, the IAEA, had reported no signs of contamination so far. Peskov said Russia is ready to support Iran, depending on Tehran's needs. "We have offered our mediation efforts. This is specific," he said. "Everything depends on what Iran needs." Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Iran raises Hormuz closure threat after US strikes

23/06/25

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23/06/25

Iran raises Hormuz closure threat after US strikes

Dubai, 23 June (Argus) — A senior Iranian lawmaker says parliament has concluded that the strait of Hormuz "should be closed" in response to US airstrikes on three nuclear sites early Sunday — a move that would severely disrupt global oil flows. Esmaeil Kowsari — a member of the national security and foreign policy commission, and a former high-ranking commander in the Islamic Revolutionary Guard Corps (IRGC) — told state-owned Press TV that lawmakers had reached a consensus that closure would be the appropriate response. Argus understands that while members of parliament were all in agreement, the issue was not formally put to a vote. Kowsari said the final decision lies with the Supreme National Security Council, Iran's top security body. His comments have drawn global attention as markets await Iran's response to the strikes, which US president Donald Trump ordered against nuclear facilities at Fordow, Natanz and Isfahan. The Fordow site is heavily fortified and located underground. The Natanz facility had already been targeted by Israeli strikes, prompting a series of retaliatory missile and drone exchanges between Iran and Israel. Iranian officials, including supreme leader Ayatollah Ali Khamenei, had repeatedly warned Washington that any direct military action would trigger a response causing "irreparable" harm to the US. . Variety of options The strait of Hormuz is the world's most critical oil transit route, with around 17mn b/d of crude and refined products — roughly a quarter of global seaborne oil trade — passing through it. Iran has repeatedly threatened to close the strait in past confrontations but has never followed through. It has, however, previously targeted or seized vessels transiting the waterway, prompting some shipowners to consider alternative routes. Closure of the strait is one of several retaliatory options regularly floated by Iranian political and military leaders. Others include military strikes on US bases across the Mideast Gulf. The US maintains installations in Bahrain, Qatar, the UAE, Kuwait, Saudi Arabia and Iraq. Asked whether closing the strait was under consideration, Iranian foreign minister Abbas Araqchi declined to confirm, saying only that "there are a variety of options available to us". Araqchi travelled to Moscow late on Sunday and is expected to meet Russian president Vladimir Putin on Monday. Moscow has condemned the US strikes. Ali Akbar Velayati, a long-time adviser to Khamenei, also issued a veiled threat to Washington, saying: "West Asia is not Greenland, and the strait of Hormuz is fundamentally different from the Panama Canal." The comment referenced earlier threats by Trump to assert US control over Greenland and the Panama Canal during the early days of his second term. US secretary of state Marco Rubio warned that any attempt by Iran to close the strait would be "a terrible mistake." "It's economic suicide for them if they do it, and we retain options to deal with that," he said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Cattle placements into US feedlots fall in May

23/06/25

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23/06/25

Cattle placements into US feedlots fall in May

Sydney, 23 June (Argus) — Placements of cattle into US feedlots during May were almost 8pc below levels a year earlier, according to the US Department of Agriculture (USDA). Fed cattle marketings fell further, contributing to a growing drop in cattle slaughtered this year. The number of cattle placed into feedlots with a capacity of thousand head or more fell to 1.89mn head, about 8pc below May last year. Total cattle and calves on feed were at 11.44mn as of 1 June, roughly the same as inventory in June 2024. Placements could continue to shrink because US feedlots face record high prices cattle prices and a ban on cattle imports from Mexico from mid-May because of the New World Screwworm outbreak. Mexico accounted for over 60pc of all cattle imports into the US last year, despite the southern border being closed from late November, USDA data show. Fed cattle marketings — or cattle leaving feedlots for processing — for May are down by 10pc on the year to 1.76mn head. Fewer cattle exiting feedlots and a smaller national herd is slowing national slaughter rates. USDA data shows commercial cattle slaughter totalled 12.54mn head in January–May, about 6pc below numbers processed in the same period last year. But the loss to beef production, which is down by only 2pc on the year over the same period, is being moderated by heavier cattle being slaughtered. Average live weights are almost 40lbs heavier over the period because cattle are being held and fed for longer. Overall beef output is forecast to fall by 2pc this year to 26,358mn lbs (11.96mn t), with the USDA revising its import estimate higher last week to 5,187mn lbs (2.35mn t) carcass weight equivalent, due in part to demand for lean trimmings. Total cow slaughter is down by 14pc on the year in January-May with cows and bulls representing a smaller share of the slaughter mix, USDA data shows. By Edward Dunlop Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Iran’s refineries at risk in escalating conflict

20/06/25

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20/06/25

Iran’s refineries at risk in escalating conflict

Iran would probably have to curtail products exports and turn to the import markets if its refineries are attacked, write Ieva Paldaviciute and Nader Itayim Dubai, 20 June (Argus) — Key oil and gas production and export facilities have stayed out of the firing line a week into the conflict between Tehran and Tel Aviv, bringing a degree of relief to global markets. But the targeting of downstream assets by both sides has raised the spectre of looming domestic fuel shortages if the conflict endures. No Iranian crude refineries have been hit yet in the Israeli strikes that, for the most part, have focused on key military and nuclear-related infrastructure and personnel. But strikes on two gas processing facilities in the south of the country and two products storage facilities on the outskirts of Tehran suggest refineries, or condensate splitters, soon could be affected. Iran retaliated by attacking Israel's 197,000 b/d Haifa refinery on 15 June, damaging is power supply system. The plant initially continued crude processing while shutting some secondary units, but it fully halted operations on 17 June. Iran has nearly 2mn b/d of crude refining capacity spread across nine facilities, which rises to about 2.4mn b/d when including the 360,000 b/d Persian Gulf Star condensate splitter in Bandar Abbas, on the Mideast Gulf coast. This is up from below 1.9mn b/d a decade ago, after capacity additions at the 58,000 b/d Shiraz, 630,000 b/d Abadan and 220,000 b/d Tehran refineries, among others. Iran nevertheless has grappled with a severe products imbalance in recent years, driven primarily by a fast increase in its domestic fuel consumption. Although operations at all refineries remain unimpeded, the conflict has triggered a frenzy of fuel buying by Iranians, particularly in Tehran, with Israel warning residents to leave the city as it intensifies its bombing campaign. If any refining infrastructure is hit, Iran may quickly have to halt products exports to ensure that domestic supply can be met. Iran is a net exporter of fuel oil and naphtha, but its position as a gasoline and gasoil exporter has diminished in recent years owing to its fast-growing domestic demand. The reimposition of US sanctions on Iran by US president Donald Trump during his first term in 2018 and his "maximum pressure" campaign on Tehran at the start of his second term in January have only added pressure to its products trade. Iranian naphtha is shipped mainly to the UAE, where it is used as a gasoline blendstock. Iran exported about 116,000 b/d of naphtha in January-May, data from consultancy FGE show, down by 12pc from its 2024 exports. Transfer news Iranian fuel oil typically makes its way to floating storage hubs in Asia-Pacific, often after multiple ship-to-ship transfers designed to obscure its origin. Some cargoes are then re-exported to China and bought by independent refiners as feedstock fuel. Fuel oil exports stood at 252,000 b/d in the first five months of this year, down from 264,000 b/d last year. Iran has had to turn to imports to bridge the gap between its gasoline production of about 660,000 b/d and average consumption of 780,000 b/d during the Iranian year to 20 March 2025, according to state-owned refiner NIORDC. Iran's diesel production has also been playing catch-up, with heavily subsidised consumption exacerbated by fuel smuggling to neighbouring countries. Iran still exported 42,000 b/d of diesel this year, according to FGE, but this is less than half of the 102,000 b/d it exported last year. The Haifa refinery is a key supplier to Israel's domestic market but it also exported about 12,000 b/d of diesel and gasoil, and 13,000 b/d of fuel oil in January-May, mostly to neighbouring countries in the Mediterranean. A prolonged shutdown could result in Israel turning to products imports, pressuring supply chains in the Mediterranean. Israel aims to restart the plant within weeks. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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