Transatlantic exports of vacuum gasoil (VGO) from Europe to the US reached their highest summer level in five years, as oversupply from European refiners — caused by secondary unit outages — led to increased shipments despite weaker netback margins.
European refineries supplied 546,000t of VGO to the US across June-August, accounting for just over half of total European VGO exports during the period, according to Vortexa. Exports increased even though US Gulf coast-delivered VGO premiums to fob ARA values averaged just $1.16/bl — the lowest in three years for the same seasonal window.
VGO is used in secondary refinery units to boost diesel and gasoline output, particularly during summer when driving demand peaks. But production capacity at secondary units in northwest Europe was reduced this summer, contributing to the surplus.
In August, ExxonMobil's 270,000 b/d Fawley refinery in the UK experienced issues with its fluid catalytic cracking (FCC) and hydrocracking units, according to market participants. That same month, the UK's 105,700 b/d Lindsey refinery ceased production after owner Prax became insolvent. Lindsey had typically sourced 35,000–45,000 t/month of VGO, according to sources.
The largest share of European VGO exports to the US this summer came from Denmark's port of Aabenraa (32pc), a long-standing supplier to the US and to Fawley. But Fawley switched to a seller position this summer due to the outages.
"Ongoing issues at Fawley resulted in excessive VGO supply," a senior VGO trader at a major operator told Argus.
Outside Europe, a turnaround at Saudi Arabia's 400,000 b/d PetroRabigh refinery in June added to the surplus. Rabigh exported 265,000t of VGO to the US — 25pc of US summer imports — and 150,000t to Europe, or 14pc of European imports.
Europe and the US, both typically short in VGO, have competed for feedstock since the 2023 ban on Russian oil products. This summer's outages enabled transatlantic flows despite weaker arbitrage economics.
US buyers accumulated VGO volumes throughout the summer to consolidate cargoes into Aframax shipments for gasoline production, participants said.
Despite the rise in volumes arriving from Europe, overall US VGO imports were not unusually strong in summer 2025, with buyers taking a more conservative stance than in previous years. But demand was supported by shortages in atmospheric tower bottoms (ATB), caused by US refinery outages, participants said.
US refiners are likely to reduce European VGO purchases for the rest of the year, as demand typically eases in the winter months. The last VGO cargo from Europe to the US is expected to arrive in mid-September, bringing 30,600t to Houston, according to Vortexa.
