Israel-Iran conflict raises European middle distillates

: Freight, Oil products
25/06/18

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

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25/07/14

Wizz Air to end Middle East operations from 1 September

Dubai, 14 July (Argus) — Hungarian low-cost airline Wizz Air said today it is halting all operations in the Middle East, effective 1 September. This is part of a "strategic realignment" of operations following "a comprehensive reassessment of market dynamics, operational challenges and geopolitical developments in the Middle East", the airline's subsidiary Wizz Air Abu Dhabi said via the X social media platform. Wizz Air Abu Dhabi faced operational challenges over the past year, including engine reliability constraints particularly in hot and harsh environments, which have affected aircraft availability and operational efficiency. It also noted geopolitical volatility, which has led to repeated airspace closures and operational disruptions, and wrecked consumer demand. Wizz Air also said regulatory barriers have limited its ability to access and scale in key regional markets. The airline said it intends to exit from the joint venture with state-owned Abu Dhabi Developmental Holding Company (ADQ). ADQ holds a 51pc stake in the venture, while Wizz Air holds the remaining 49pc. Wizz Air said it will turn its focus back on its core Central and Eastern Europe, as well as select western European markets such as Austria, Italy and the UK. Wizz Air Abu Dhabi began operations in early 2021 , after receiving its air operator certificate from the UAE's General Civil Aviation Authority in October 2020 . By Ieva Paldaviciute Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump threatens Mexico, EU with 30pc tariffs

25/07/12

Trump threatens Mexico, EU with 30pc tariffs

Washington, 12 July (Argus) — President Donald Trump on Saturday said the US will impose 30pc tariffs on goods imported from Mexico and the EU beginning on 1 August. In a move that could significantly disrupt crude, refined product and other commodity flows, Trump made public on his social media platform letters sent to Mexican president Claudia Sheinbaum and European Commission president Ursula von der Leyen on Friday threatening the new tariffs. Trump also vowed to raise the tariffs even higher if Mexico or the EU were to retaliate with their own measures. The threats follow similar letters sent to leaders of other countries this past week, including a 35pc tariff on Canadian imports , likewise starting on 1 August, and a 50pc tariff on Brazilian imports . In his letter to Sheinbaum, Trump repeated previous justifications for higher tariffs by pointing to "Mexico's failure to stop the Cartels" smuggling fentanyl into the US. "Mexico has been helping me secure the border, BUT, what Mexico has done is not enough," Trump wrote. "If for any reason you decide to raise your Tariffs, then whatever the number you choose to raise them by, will be added onto the 30pc that we charge," Trump wrote to Sheinbaum. His letter to von der Leyen included similar language. Trump's previous executive orders regarding tariffs on Mexico and Canada carved out exemptions for goods compliant with the US-Mexico-Canada free trade agreement. A White House official on Friday, following Trump's 10 July Canadian tariff announcement, said the exemption will remain in place, with a caveat that Trump has yet to determine the final form of application. Regarding the EU, Trump argued the 30pc figure "is far less than what is needed to eliminate the Trade Deficit disparity we have with the EU". Mexico's ministries of the economy, foreign affairs, finance, security and energy said in a statement Saturday that they met with their US counterparts on Friday to begin negotiations to head off the new tariffs before 1 August. "We stated at the meeting that [the new tariff plan] was unfair treatment and that we disagreed." After receipt of the new tariff letter, von der Leyen said Trump's tariffs "would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic". The US has clinched only one limited trade deal, which keeps in place a 10pc tariff on US imports from the UK while granting a lower-tariff import quota for UK-made cars. Trump has announced a deal with Vietnam, setting tariffs at 20pc. By David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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

25/07/11

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

25/07/11

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

25/07/11

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.

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Israel-Iran conflict raises European middle distillates

Related news posts

Wizz Air to end Middle East operations from 1 September

Wizz Air to end Middle East operations from 1 September

Trump threatens Mexico, EU with 30pc tariffs

Trump threatens Mexico, EU with 30pc tariffs

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

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