Shifting incentives bring uncertainty, limit liquidity in spot California R99 markets
Summer has brought record low R99 cash prices — and nearly 3.2mn bl of vessel-supplied renewable diesel — to key California distribution hubs, but those seeking to take long-term supply positions must grapple with changing incentive programs and yet unseen consequences for supply flows.
Looking ahead to the end of 2024, the future of RD supply is murky. Changing credit eligibility could discourage the volume of imports the west coast has grown accustomed to, domestic refining margins at the US Gulf coast have been indicated on the decline for much of the year, and a volatile underlying CARB diesel basis increases participants’ exposure to price risk.
Cash prices for R99 at the head of the pipeline (hop) in Los Angeles hit their lowest level in Argus series history on 6 August, when a downturn in the underlying CARB diesel basis pressured values to just $2.35/USG. The price slide, coupled with anecdotally unworkable spreads to local rack prices, weighed heavily on activity this summer, despite a steady stream of offshore shipments.
Deliveries via vessel to northern California in August were the second highest in Argus history at an estimated 741,000 bl — the latest in steady monthly increases since June — per data aggregated from bills of lading and global trade and analytics platform Kpler. Jones Act vessels from the US Gulf coast alone accounted for 448,000 bl, while shipments ex-Singapore constituted the remaining volume.
Southern California received an estimated 847,000 bl, almost evenly split between offshore suppliers and those at the US Gulf coast.
But the future of renewable diesel supply flows into California is mired with uncertainty surrounding incentives for both importers and domestic refiners. The BTC is set to expire with the 2024 calendar year, giving way to the IRA’s Clean Fuel Production Credit. The change would heavily favor US-based renewable diesel production and reduce awards for high-volume offshore imports to the US west coast, the latest pivot for an adolescent market that has struggled to achieve supply equilibrium.
Waterborne renewable diesel deliveries to California ports
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Neste — the leading offshore supplier of US R99 — is also slated to undergo turnarounds at both its Rotterdam, Netherlands, and Singapore facilities this quarter, followed by a second short-term Singapore turnaround in the fourth quarter. But the import lineup so far does not reflect a disruption in deliveries to the US this quarter.
At home, refining margins at the US Gulf coast are indicated on the upswing after narrowing through early August.
Renewable diesel deliveries to the west coast by rail from other US regions reached a record-high of nearly 2mn bl in May, per data from the Energy Information Administration (EIA). Shipments by vessel are also trending higher, with an estimated 864,000 bl delivered to California in August — the highest since November.
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Spot R99 markets in California were little tested at the end of August, although both the Los Angeles and San Francisco markets drew support from a controversial surprise proposal to limit California Low Carbon Fuel Standard credit generation for renewable diesel made from soybean or canola oils. The California Air Resources Board will also consider a one-time tightening of annual carbon reduction targets for gasoline and diesel by 9pc in 2025, compared with the usual 1.25pc annual reduction and a 5pc stepdown first proposed in December 2023, per a 12 August release.
But an unsteady economic landscape for domestic production remains a key decision-driver among US refiners.
Vertex Energy will begin reversing a renewable fuels hydrocracking unit back to conventional fuel feedstocks this quarter at its 88,000 b/d Mobile, Alabama, refinery. The company at the time cited headwinds in the renewable fuels market that it expects to persist through 2025.
Author: Jasmine Davis, Editor, Associate Editor – Oil Products
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France's fossil fuel roadmap a key step: think tanks
France's fossil fuel roadmap a key step: think tanks
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N African bitumen buyers look west for supply
N African bitumen buyers look west for supply
London, 29 April (Argus) — North African bitumen buyers swung away from Greek supply and instead bought more Spanish and Italian product, which was often cheaper and more plentiful, particularly in the first quarter of this year. North African imports of Greek bitumen totalled 65,000t in the first quarter, compared with 164,000t in the same period of 2025, Kpler data shows. Imports from Greece also fell significantly in the fourth quarter of 2025, with the western Mediterranean becoming the primary import option for north African contractors. After the US-Israeli strikes on Iran on 28 February and following the blockade of the strait of Hormuz, market participants in Algeria and Morocco anticipated significantly tightened supply out of Greece. Exports out of Greek refineries, particularly Motor Oil Hellas' (MOH) 180,000 b/d Agioi Theodoroi plant, remain short in supply with feedstock crude cargoes held up in the strait of Hormuz. The refinery regularly imports bitumen-rich crude such as Iraqi Basrah. Meanwhile, exports from Helleniq Energy's 140,000 b/d Aspropyrgos refinery have been less appealing to north African buyer. Any shift to Aspropyrgos is difficult after prolonged maintenance cut production. The work, originally planned for February-March, is now scheduled to end in early May. In addition to this, contractors in Algeria and Morocco were already sitting on surplus stocks accumulated over the fourth quarter of 2025. This allowed them to back off from new, more expensive deals out of the eastern Mediterranean after the Iran war sent high-sulphur fuel oil (HSFO) and crude prices soaring. Both Spanish Repsol-Asesa joint owned 180,000 b/d Tarragona and Italian Sonatrach-owned 198,000 b/d Augusta refineries were able to offer cargoes at lower values. In the first quarter, Spanish and Italian exports to north Africa totalled 31,000t and 122,000t, respectively. Algeria, which had not imported Spanish cargoes since 2023, briefly resumed such imports owing to weaker cargo values offered. Spain's Repsol was largely immune to price spikes as surplus cargo availability and tepid domestic demand allowed them to offer cargoes at a discount of $15-20/t to fob Mediterranean HSFO values in March, compared to closer to flat to HSFO for other Mediterranean suppliers. Looking ahead, Algerian and Moroccan bitumen demand is expected to increase in the coming weeks. Some of this demand will continue to be met by western Mediterranean refiners. Turkey's Dortyol, is now offering greater volumes after flows of product originating in Iraqi Kurdistan resumed in December. By Navneet Vyasan North African bitumen imports Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Forest loss fell in 2025, but from record high: Report
Forest loss fell in 2025, but from record high: Report
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Australia promises no gas tax on existing LNG contracts
Australia promises no gas tax on existing LNG contracts
Sydney, 29 April (Argus) — No export taxes will be placed on LNG contracted by trade partners, Australia's prime minister has promised, after weeks of intensive lobbying by unions, anti-gas campaigners, economists and industry. The weeks following the US-Iran war showed it was critical to not jeopardise trade links with Asia or the investment needed from overseas partners, prime minister Anthony Albanese said in Perth on 29 April. Anti-fossil fuel groups had been calling for a 25pc tax on exports to raise money for Australia's weakening federal budget. But Western Australia's premier and other key Labor politicians close to the resources sector opposed such measures, citing the need for investment continuity . An east coast gas reservation would instead be instituted but only affect future export contracts , Albanese added. The ongoing shock from the Middle East war is leading to a renewed spotlight on Australia's lack of sovereign refining capacity. Australian ministers have been regularly dispatched to trading partners in east Asia in recent weeks to shore up supplies of gasoil, gasoline and jet fuel as well as fertilizer. Australia holds only 49 days' supply , slightly more than half of the IEA's mandated net import coverage of 90-days at the end of February and down by one day from January. Australia held 44 days of gasoline, 33 days of gasoil and 30 days of jet fuel consumption under its minimum stockholding obligation as of 21 April. The foreign minister is travelling to Japan, China and South Korea this week , which receive large volumes of Australian LNG and also export significant fuel volumes to Australia. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.