Israel-Iran conflict raises European middle distillates

Spanish Market: Freight, Oil products
18/06/25

The continuing and escalating conflict between Israel and Iran is rallying European jet fuel and diesel values, due to fears of supply tightness.

The rise in middle distillate values has outstripped those in crude in the past week, suggesting European jet fuel and diesel markets are pricing in the risk of substantial supply constraint arising from Israeli-Iranian tensions. This has not happened yet, with the conflict in a sixth day.

Front-month Ice gasoil futures — the underlying value in Argus' European jet fuel and diesel assessments — settled at $731/t on Tuesday, 17 June, up by $45.75/t on the day. This was the highest settlement since 20 February, and the largest daily increase since the start of the Russia-Ukraine war in 2022.

Argus priced cif northwest European jet fuel and fob ARA diesel at $789.75/t and $744.50/t on Tuesday, the highest assessments since January.

Refining margins for cif northwest European jet fuel and diesel to North Sea Dated crude were $5.17/bl and $4.07/bl higher on the week, at $22.46/bl and $22.45/bl respectively, at Tuesday's close. This is the widest jet fuel crack in a year and the widest diesel crack since February.

Although supply has not yet been affected, freight sources told Argus they expect Additional War Risk Premiums (AWRPs) in the Mideast Gulf to rise sharply in the coming days, which could weigh heavily on arbitrage economics to Europe and dissuade shippers from sending product to the region.

Loadings of 10ppm diesel and jet totaled 430,000 b/d and 460,000 b/d respectively from ports in the Mideast Gulf in May, according to Kpler, or 11pc and 28pc of global daily loadings. With much of this heading to European destinations, the prospect for disruption is clear.

Prompt supply concerns are also reflected through the difference between front- and second-month Ice gasoil futures contracts. The backwardation structure steepened from $9.75/t on Monday to $15/t at Tuesday close. Backwardation between the second- and third-month contracts stretched to $10/t on Tuesday, the widest since February. This suggests concern that supply issues could persist for several months.

Europe was already facing unworkable diesel arbitrages for cargoes loading from east of Suez ports for northwest European destinations. Seasonal European jet fuel demand usually relies on supply from the Middle East, the largest jet fuel exporting region to Europe.

By Amaar Khan and George Maher-Bonnett

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

11/07/25

US to loan 1mn bls crude to Louisiana refinery: Update

Adds details on crude quality issues from Mars pipeline. Washington, 11 July (Argus) — ExxonMobil will borrow up to 1mn bl of crude from the US Strategic Petroleum Reserve (SPR) for its 522,500 b/d refinery in Baton Rouge, Louisiana, in response to a disruption to offshore supply of crude for the facility. ExxonMobil warned suppliers last week of "serious quality issues" related to elevated levels of zinc in crude supplied by the Mars pipeline, which brings crude from a series of deepwater fields in the Gulf of Mexico to shore, according to market sources. In letters to suppliers ExxonMobil said the crude quality issues were "... significantly affecting the operations at our Baton Rouge Refinery," and that it would stop accepting Mars crude "... in an effort to avoid further damages." The US Department of Energy said today it had approved the loan to ExxonMobil, called an exchange, to ensure a stable supply of transportation fuels in Louisiana and the US Gulf coast. The agency said the crude loan will support ExxonMobil's "restoration of refinery operations that were reduced due to an offshore supply disruption." Chevron, one of the producers that contributes crude to the Mars pipeline, said it has "identified a potential contributing source to the Mars crude composition changes, which is associated with the start-up of a new well." Chevron said it was working to resolve the matter and does not expect it to affect current production guidance. In April Chevron started production from a new deepwater field , Ballymore, which ties into the Mars system. Shell, which owns a majority stake in the Mars pipeline, did not respond to a request for comment. Mars premium to WTI falls The August Mars premium to Nymex-quality WTI has dropped nearly $1/bl in the last week. The August Argus Mars volume-weighted average assessment on Thursday was a 9¢/bl premium to the Nymex-quality WTI Cushing benchmark, nearly $1/bl lower than a week earlier. Mars averaged a 63¢/bl premium for the August trade month through Thursday, but was at a $1.40-$1.50/bl premium at the start of the trade month. The August trade month started 26 June and ends 25 July. The SPR, which consists of four underground storage sites in Texas and Louisiana, held 403mn bl of crude as of 4 July. Under the exchange announced today ExxonMobil will eventually return the borrowed crude — along with additional crude as payment for the loan — to the SPR. The SPR's Bayou Choctaw site connects to refineries in Baton Rouge through the Capline pipeline. In 2021, the Department of Energy authorized a loan of up to 3mn bl from the SPR to ExxonMobil's refinery in Baton Rouge to address disruptions related to Hurricane Ida. ExxonMobil was initially scheduled to return the crude in 2022, but that deadline has been repeatedly pushed back, most recently to require a return of the crude by March 2026. By Chris Knight, Eunice Bridges and Amanda Smith Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Congress resumes push to cut US shipping pollution

11/07/25

Congress resumes push to cut US shipping pollution

New York, 11 July (Argus) — US lawmakers reintroduced two bills Thursday to slash greenhouse gas emissions from the shipping industry. Senators Sheldon Whitehouse (D-Rhode Island) and Alex Padilla (D-California), along with US House of Representatives members Doris Matsui (D-California) and Kevin Mullin (D-California), reintroduced the International Maritime Pollution Accountability Act, which would impose pollution fees on large ships calling at US ports. The bill targets vessels over 5,000 gross tonnes with a $150/t fee on carbon, plus fees on nitrogen oxides at $6.30/lb, sulfur dioxide at $18/lb, and fine particulate matter at $38.90/lb. Ship operators would only pay the carbon fee if no equivalent global measure from the International Maritime Organization (IMO) is in place. Revenue would go toward modernizing the Jones Act fleet with low-emission ships, electrifying shipbuilding, and addressing pollution at US ports. The group also reintroduced the Clean Shipping Act of 2025, led in the House by Representatives Robert Garcia (D-California). It directs the Environmental Protection Agency to impose carbon intensity standards for marine fuels, targeting 30pc lifecycle CO2-equivalent emissions reduction from 2030, 58pc from 2034, 83pc from 2040, and 100pc from 2050. It also requires all ships at berth or anchor in US ports to emit zero emissions by 2035. The lawmakers say the proposed bills also close a major loophole. Marine shipping is largely exempt from fuel taxes unlike other transport sectors. They say the plan will also support US manufacturing and help reduce the US trade deficit. The International Maritime Pollution Accountability Act is endorsed by environmental and advocacy groups including Friends of the Earth, Sierra Club and Ocean Conservancy, among others. The original bills were introduced in 2023 and expired without being enacted. The bills follow the IMO's decision in April to adopt a net-zero framework and a global carbon price proposal for shipping. The US delegation was absent from IMO's April meeting, issuing a statement that "President Trump has made it clear that the US will not accept any international environmental agreement that unduly or unfairly burdens the US or the interests of the American people ." By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Canada focuses on new US deadline, diversifying trade

11/07/25

Canada focuses on new US deadline, diversifying trade

Calgary, 11 July (Argus) — Canadian prime minister Mark Carney reiterated his plan to diversify trade with countries "throughout the world" following another round of tariff threats, and another deadline, from US president Donald Trump. Carney's comments on social media late on 10 July came hours after Trump said Canada could expect a 35pc tariff on all imports , effective 1 August, repeating earlier claims that the northern country was not doing enough to stop fentanyl from crossing into the US. Canada has said these claims are bogus but in late-2024 still committed to spending $900bn (C$1.3bn) on border security measures over six years. "Canada has made vital progress to stop the source of fentanyl in North America," Carney wrote on X. The prime minister said he is now working to strike a new trade deal before the 1 August deadline. Trump and Carney last month agreed they would work toward a broad trade agreement by mid-July, with Canada at the time targeting 21 July to finalize a deal. The 35pc tariff would be separate from tariffs set for specific sectors, which include a 50pc tariff on copper imports. It is not clear if any imports currently covered by the US-Mexico-Canada trade agreement (USMCA) would be affected by Trump's latest tariff threats. Carney has advocated the need to shore up trade partnerships with "reliable" countries since being sworn is as prime minister in March, saying the old relationship with the US "is over". The energy-rich nation needs to build more infrastructure to unlock this potential, and with a surge in public support, is trying to entice developers with a new law to fast-track project approvals . But those are multi-year efforts and Canada is still trying to reach a deal with the US to keep goods moving smoothly. The two economies are highly integrated with $762bn worth of goods crossing the US-Canada border in 2024, according to the Office of the US Trade Representative. Canada on 29 June rescinded a digital sales tax (DST) that would have collected revenue from the US' largest tech companies, after US secretary of commerce Howard Lutnick said the tax could have been a deal breaker in trade negotiations. That show of good faith — which seemingly got nothing in return — was criticized within Canada and contrary to Carney's repeated "elbows up" mantra in the face of Trump's threats. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IEA trims oil demand outlook on 2Q weakness: Resend

11/07/25

IEA trims oil demand outlook on 2Q weakness: Resend

removes reference to implied surplus London, 11 July (Argus) — The IEA has trimmed its forecast for global oil demand growth in 2025 by 20,000 b/d to 700,000 b/d, citing weaker-than-expected deliveries in the second quarter across several tariff-affected economies. The agency also revised down its 2026 growth outlook by the same amount, to 720,000 b/d. The updated figure for 2025 marks the slowest annual increase in demand since 2009, excluding Covid-affected 2020. The IEA said the second-quarter slowdown followed an unusually strong first quarter in the OECD, which had been boosted by colder-than-average winter weather. "Although it may be premature to attribute this slower growth to the detrimental impact of tariffs manifesting themselves in the real economy, the largest quarterly contractions occurred in countries that found themselves in the crosshairs of the tariff turmoil," the agency said, pointing to declines in China, Japan, Korea, the US and Mexico. The IEA now expects global oil demand to average 103.68mn b/d in 2025 and 104.4mn b/d in 2026. Petrochemical feedstocks — namely LPG/ethane and naphtha — will account for two-thirds of this year's growth, it said. Transport fuel demand remains under pressure in key markets such as China, where electrification and efficiency gains are weighing on gasoline use despite strong mobility indicators. On the supply side, the IEA raised its forecast for global oil supply growth in 2025 by 240,000 b/d to 2.1mn b/d, putting full-year supply at 105.1mn b/d. The upward revision reflects a faster-than-expected unwinding of Opec+ voluntary cuts, with Saudi Arabia accounting for most of the increase. Non-Opec+ producers still dominate overall growth, contributing 1.4mn b/d in 2025. By James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tighter supplies lift Singapore trucked bitumen prices

11/07/25

Tighter supplies lift Singapore trucked bitumen prices

Singapore, 11 July (Argus) — Trucked bitumen prices in Singapore have risen sharply since late June on the back of tighter availability, despite moderate demand from key export market Malaysia. Singapore-origin bitumen sold by tanker truck to Malaysia was priced at $480–500/t ex-refinery in the week to 11 July, up from $470–485/t ex-refinery the week before, according to Argus data. Prices stood at $424–440/t ex-refinery at the end of June. Malaysian bitumen demand has been supported by several projects taking place after the Hari Raya Haji holiday that are currently underway in the third quarter, coinciding with the release of the annual infrastructure budget. But market participants described demand as moderate, as many of the projects are small-scale road works focused on maintenance and paving. Some construction activity has also been disrupted by intermittent rain in key cities including Johor Bahru and Kuala Lumpur. Market participants said overall bitumen availability in Malaysia is ample, with steady supplies from Malacca, Tanjung Langsat and Port Klang. One major Malaysian refinery sold inconsistently over the past two weeks while blending new products, but buyers said supply has since stabilised. Limited availability from Singapore and relatively firm demand from key consumer Vietnam continue to support seaborne prices. Argus assessed fob Singapore ABX 1 prices at $430/t on 10 July, up from $395/t at the start of June. Singapore trucked bitumen cargoes typically command a $10–15/t premium to ABX 1 prices, but the premium widened to about $50–70/t in July. Traders in Malaysia expect increased supply relative to demand in the coming weeks, which they said could pressure trucked Singapore prices. Current offers from Singapore are limited to 1-3 truckloads per day — down from the usual 5-6 — but many Malaysian buyers are already not fully utilising their quotas, dealers said. By Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more

Israel-Iran conflict raises European middle distillates

Related news posts

US to loan 1mn bls crude to Louisiana refinery: Update

US to loan 1mn bls crude to Louisiana refinery: Update

Congress resumes push to cut US shipping pollution

Congress resumes push to cut US shipping pollution

Canada focuses on new US deadline, diversifying trade

Canada focuses on new US deadline, diversifying trade

IEA trims oil demand outlook on 2Q weakness: Resend

IEA trims oil demand outlook on 2Q weakness: Resend

Tighter supplies lift Singapore trucked bitumen prices

Tighter supplies lift Singapore trucked bitumen prices

Business intelligence reports

Argus Specialised Freight

Argus Specialised Freight

Argus Asphalt Forward Curves

Argus Asphalt Forward Curves

Argus O.M.R. Fuels

Argus O.M.R. Intraday

Argus Fundamentals