Exxon to offer Grp II alternative to bright stock

: Oil products
24/11/20

ExxonMobil is set to offer a high-viscosity Group II alternative to the Group I bright stock grade by 2025, delegates heard at the European Base Oils and Lubricants summit today.

ExxonMobil's Group II EHC340 max will be produced out of the company's Jurong refinery in Singapore.

The new product aims to provide an improved alternative to Group I bright stock by offering "more efficient formulation costs, improved low-temperature fluidity and higher durability," said Erdem Kok, ExxonMobil's Eastern Asia and Middle East basestocks technical advisor.

There is no large-scale alternative for Group I bright stock. Bright stock is mostly produced for industrial use, due to its high viscosity levels.

ExxonMobil is working with several additive companies to gain the required approvals for this product before 2025. The Group II bright stock and will add to Exxon's current Group II grades, which include low- and mid-viscosity base oils.

ExxonMobil will cater the Group II bright stock to European customers by delivering material to its 900,000 t/yr Group II plant in Rotterdam, the company told Argus.

Argus Group I spot prices are facing downward pressure from persistently weak demand. The limited interchangeability and a structural shortage globally are tempering its drop in price.

By Christian Hotten

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25/02/04

Chinese UCO fate sealed long before tariffs

New York, 4 February (Argus) — Broad US tariffs on Chinese imports that took effect today may reshuffle trade flows between the world's two largest economies, but demand for the once-pivotal US biofuel feedstock Chinese used cooking oil (UCO) was already waning. China exported 2.7bn lbs of UCO into the US over the first 11 months of 2024, more than any other foreign supplier, up from 1.6bn lbs in 2023 and just 100,000 lbs in 2022, according to US customs data. Clean fuel standards in states like California, Oregon, and Washington, along with a federal tax credit that rewards biofuels that produce fewer greenhouse gas emissions, spurred refiners to look beyond domestic supply and import low-carbon wastes from abroad. The US' new 10pc tariffs on Chinese imports could discourage further imports, since US refiners have a range of feedstock options for renewable diesel and sustainable aviation fuel (SAF) production. The US trade representative did not immediately confirm the tariff rate for UCO, but there was already an 8pc tariff on UCO from all origins and an additional 7.5pc tariff on China-origin UCO before even factoring in the new surcharge on all imports. Both countries have also recently taken steps to curb Chinese UCO exports, making further growth in UCO trade less likely, even if tariffs go away. China late last year cancelled a 13pc export tax rebate for UCO, reducing a key incentive to send the feedstock abroad at a time when the country is aiming to use more SAF domestically. The administration of former president Joe Biden then took steps to cut off US demand, closing off opportunities for fuels derived from foreign UCO from claiming a tax credit crucial for production margins. That incentive, known as "45Z," offers increasingly generous subsidies to fuels as they produce fewer emissions, which was initially expected to benefit refiners sourcing UCO over first-generation crop feedstocks. But the new government emissions model that road fuel producers must use to claim the credit for now offers no pathway for fuels derived from foreign UCO. The US Treasury Department justified the restriction by saying it had "significant concerns" about distinguishing imported UCO from palm oil, which is ineligible for 45Z. The guidance is only preliminary, meaning President Donald Trump will have the final say on how the government enforces rules around the credit. But the new administration is likelier to pursue even more sweeping restrictions on foreign feedstocks, which Republican lawmakers have argued are hurting demand for US crops that can also be refined into fuel. Republicans could use budget legislation this year to change the credit too, and key lawmakers on the House tax-writing committee have already floated potential restrictions on foreign feedstocks. There are some caveats to US biofuel markets that mean UCO imports will not entirely go away absent more muscular trade restrictions. US biofuel producers with foreign UCO on hand can still sell into state low-carbon fuel standard markets like California, which have not restricted the feedstock. And the current guidance around 45Z allows producers of SAF — but not road fuels — to use an alternative lifecycle emissions model known as CORSIA, which does not restrict any sources of UCO. Valero senior vice president Eric Fisher said last week on an earnings call that the current restrictions on road fuels derived from foreign UCO claiming 45Z would not affect Diamond Green Diesel, the refiner's joint renewable fuels venture with Darling Ingredients. Foreign UCO has "always" been directed to meet SAF demand in Europe and the UK, Fisher said, and the recent guidance "does not really change what we were going to do strategically with that feedstock." Europe and the UK have 2pc SAF mandates starting this year, though requirements do not become significantly more stringent until 2030. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso volatility persists despite tariff delay

25/02/04

Mexican peso volatility persists despite tariff delay

Mexico City, 4 February (Argus) — The Mexican peso remains volatile despite a bump from the last-minute deal postponing US President Donald Trump's threatened 25pc tariffs on Mexican imports, financial analysts said. The US agreed Monday to delay the tariffs for one month after discussions between Trump and Mexican President Claudia Sheinbaum. In return, Mexico pledged to deploy 10,000 National Guard troops to its northern border to combat drug trafficking, with a focus on fentanyl. The peso initially reacted positively to the news, strengthening by nearly 3pc late Monday after the agreement was announced. Still, today the Mexican peso weakened 0.4pc to Ps20.5 to the dollar by the end of trading, according to data from Mexico's Central Bank (Banxico). The peso has depreciated 16.6pc against the dollar from a year ago, according to Banxico data. The currency will remain volatile until there is greater clarity on whether tariffs will ultimately be imposed and at what level, BBVA Mexico bank analysts said in a note. If the US proceeds with a 25pc tariff, the peso could weaken to Ps24/$1, pushing Mexico's economy into a 1.5pc contraction this year, according to the bank. A lower 10pc tariff would be more manageable, BBVA Mexico added, as peso depreciation would offset some cost increases for US importers. In that scenario, Mexico's economy could still grow by 1pc in 2025. "Markets have debated whether to take Trump's policy promises seriously but not literally, or both seriously and literally," Barclays analysts wrote in a note to investors. Barclays also noted that the US sees itself as having the upper hand in any trade war, as a far greater share of Canadian and Mexican exports depend on US demand than vice versa. Mexico's state-owned oil company Pemex typically benefits from peso depreciation because of its US dollar-denominated crude exports, which help offset higher fuel import costs. "Pemex's revenues are tied to international oil prices, providing a natural hedge," the company said in its latest earnings report. However, analysts warned that Pemex's shift toward domestic refining over exports could reduce this buffer, leaving the company more vulnerable to foreign exchange swings, particularly as it carries a large dollar-denominated debt load. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Engie converts Chile diesel plant to renewables

25/02/04

Engie converts Chile diesel plant to renewables

Santiago, 4 February (Argus) — French utility Engie has started commercial operations at its 68MW Tamaya battery energy storage system (BESS) on the site of its former diesel-fired power plant near Tocopilla in northern Chile's Antofagasta region. BESS Tamaya will store electricity generated by the 114MW Tamaya photovoltaic (PV) plant on the same site, which began operations in February 2022. The company is "repurposing the site to give it a second life and continue contributing to the local economy," said Engie Chile chief executive Rosaline Corinthien. BESS Tamaya consists of 152 lithium battery containers with a storage capacity of 418MWh. It will be able to supply 50,800 homes over five hours of peak demand. Engie is also constructing the 116MW Tocopilla BESS operation at its former Tocopilla coal and fuel oil-fired power complex in the same region. It disconnected the complex from the grid in September 2023. Engie is the fourth-largest generator in Chile with 2.6GW of installed capacity. Its BESS portfolio consists of 2GWh in operation and construction. The conversion of fossil fuel-fired plants is part of Chile's decarbonization plan to ensure a "just" energy transition, providing new sustainable economic activity for communities. Since 2019, Chile has withdrawn 11 coal plants for a combined 1.7GW and is committed to closing the remaining 17 coal plants by 2040. By Emily Russell Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US delays Mexico tariffs by a month: Update

25/02/03

US delays Mexico tariffs by a month: Update

Adds comments from press conference, White House response, historic context. Mexico City, 3 February (Argus) — The US has agreed to postpone the 4 February implementation of 25pc tariffs on Mexican goods by one month to allow more time for negotiations, President Claudia Sheinbaum said today. Under an agreement with the US, Mexico will immediately reinforce its border with the US with 10,000 national guard troops to limit drug trafficking into the US, with a specific focus on fentanyl, Sheinbaum posted on social media platform X. The US pledged to take stronger action to curb the flow of high-powered firearms into Mexico, she said. The pause will allow "Mexico time to demonstrate good results for the US people and our people" on key security concerns, Sheinbaum said. US president Donald Trump confirmed the tariff delay in a social media post, saying there would be negotiations in the coming weeks with Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick. The White House praised Mexico's willingness to respond positively to the tariff threats, while characterizing the Canadian response as [a] misunderstanding. "The good news is that in our conversations over the weekend, one of the things we've noticed is that Mexicans are very, very serious about doing what President Trump said," White House National Economic Council director Kevin Hassett said in a broadcast interview. Canada had "misunderstood the plain language of the executive order and they're interpreting it as a trade war." Trump said this morning that he "looks forward to negotiations" with Sheinbaum to reach a deal between the countries. He is also talking to Canadian premier Justin Trudeau later today. The announcements today do not address Trump's complaints of a trade deficit with Mexico, which Sheinbaum said during a press conference today the US misinterprets as a negative. Both the US and Mexico benefit from the region becoming more competitive, she said. Mexico will also keep its retaliatory tariffs on the table: "We will save Plan B for later, if necessary," Sheinbaum said. The current tensions are similar to those from 2019, when Trump threatened to impose 5pc tariffs on all Mexican goods. He relented when former president Andres Manuel Lopez Obrador said Mexico would deploy 21,000 national guard troops to contain the flow of migrants toward the US. If the tariffs were implemented, it would disrupt the energy trade between the US and Mexico. Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Mexico also imports much of its road fuels and LPG from the US. But the country is unlikely to hit these goods with retaliatory tariffs, according to market sources. By Antonio Gozain and Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

European products markets open higher on US tariffs

25/02/03

European products markets open higher on US tariffs

London, 3 February (Argus) — European light and middle distillate markets opened higher today after US tariffs against China, Mexico and Canada were announced over the weekend, but market participants reacted cautiously to the move. US president Donald Trump on 1 February slapped tariffs of 10pc on Canadian energy imports, which account for a significant share of foreign crude and products supply into the US. The tariff rate against Canada stood in contrast to the 25pc tariff applied to Mexico, which may be designed to mitigate the inflationary effect of costlier Canadian crude and products imports in the US market. Eurobob non-oxy gasoline barges were trading at a volume-weighted average of $728/t at 13:40 GMT, up from $715/t since the 31 January close, while underlying Ice February gasoil futures — the futures value against which diesel and jet cargoes are traded — was higher at $727/t, up from $711.25/t. Brent crude values were just 14¢/bl higher, as product cracks firmed by 19.1pc and 8.6pc to $10.37/bl and $20.43/bl against Brent futures for non-oxy barges and Ice gasoil futures, respectively. Any Canadian product sales into the US would see tariffs passed onto the buyer, according to one source with knowledge of the matter, adding they were waiting to see how Canada otherwise responds to the US tariffs. Canadian refiners could also start sending their product to west Africa or Latin America, another source close to the matter told Argus last week. This ‘wait-and-see' approach was echoed by one Mideast Gulf gasoline trader, while two European analysts said the desired policy outcome of rebalancing trade between the US and Canada was not straightforward, and may make Canadian products imports more affordable as the Canadian dollar depreciates. The US may be better prepared for a gasoline supply shock as a result of seasonal stockpiling, one analyst said, but the US Atlantic Coast has a more significant gasoline supply shortage than Canada if gasoline output were to remain in the domestic market north of the border, another said. In a sign of concerns over US Atlantic Coast diesel tightness, the Sebarok Spirit LR2 appeared to have been booked to deliver a mixed cargo of 10ppm diesel and gasoline from the Port of Antwerp to New York by 15 February, according to Kpler tracking data. These type of voyages "never happen", one analyst said, with Europe structurally short of diesel and the ARA hub a reliable diesel buyer of last resort. The vessel was still anchored at the Port of Antwerp today. In the event of lower Canadian crude deliveries to US refineries, US product cracks could strengthen, one analyst said, but added a halt in supplies of Western Canadian Select (WCS) to US refineries was unlikely. A strengthening in product cracks could exacerbate a seasonal improvement in Rbob gasoline premiums ahead of the summer driving season, the source said, while transatlantic diesel arbitrage economics could remain shut firmly for longer — closing off a key supplier from the European diesel market. It was not immediately clear how product flows from Canada to the US were otherwise impacted today, as most product exports into the US are made via pipeline. No new gasoline or diesel cargoes were recorded loading at Canadian ports signalling US delivery by Kpler today. Two vessels carrying clean products from Valero's 265,000 b/d Jean Gaulin refinery, Quebec, were sitting offshore northeast US signalling to discharge volume at New Haven, Connecticut on 5-6 February. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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