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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US high-balling Hormuz energy flows
US high-balling Hormuz energy flows
New York, 20 August (Argus) — US officials continue to claim a high number of tankers are exiting the strait of Hormuz through US-assisted transits, despite vessel tracking and satellite information pointing to much lower traffic through the strait. "Right now, the strait is open. A lot of boats are coming through. We are getting a lot of oil out," US President Trump said on 19 August at the White House. But vessel information firm TankerTrackers.com said on 20 August that only 5mn b/d is departing the US Navy blockade line regardless of where the loading or transfer of crude is taking place, in response to claims by US officials that 10mn b/d are traveling through the strait of Hormuz. The US-imposed blockade on Iranian ports is being enforced from outside the strait of Hormuz between the Gulf of Oman and the Arabian Sea, so the TankerTrackers.com figure likely includes loadings at the UAE and Oman's eastern ports within the Gulf of Oman, beyond the confines of the strait itself. US Energy Secretary Chris Wright claimed last week that an average of 9mn b/d exited the strait of Hormuz, a figure much higher than available information. "We do have control of the strait, you would have seen media reports that large amounts of energy are getting out, and you know I think that we can continue doing that in the southern lane," US Treasury Secretary Scott Bessent in an interview with CNBC on 20 August. Available vessel tracking and satellite data does not corroborate the assertions made by US officials that many tankers are going through the strait of Hormuz on the US' southern transit lane. Some tanker traffic is occurring through the strait, undetected by conventional vessel tracking systems since vessels are transiting with their automatic identification systems off. But these transits are visible through satellite imagery, on both the US-supported southern lane and the northern Iranian-controlled lane, data from maritime security firm Windward shows. These observable flows are at a fraction of pre-war levels, while many vessels transiting through the southern lane have been subject to attacks by Iranian forces. Tanker flows through the strait of Hormuz itself are projected by vessel tracking firm Vortexa to stand at around 941,400 b/d for the period of 14-21 August, comprised mostly of Iraqi and Saudi shipments. Most of the energy that is leaving the Mideast Gulf following the outbreak of the US-Iran war is doing so through the UAE and Oman's eastern ports. Estimates from Vortexa place exports via Fujairah port in the week between 14-21 August around 2.06mn b/d while exports via Sohar and Muscat, Oman, totaled around 1.15mn b/d in the same period. Vessel tracking data shows around 4mn b/d total departing from around the Mideast Gulf, including flows through Hormuz, in the last week. The White House did not respond to a request for comment from Argus to provide additional details on the US' efforts to support tanker transits through the strait of Hormuz. Hormuz tanker traffic on Iranian lanes up Vessel traffic through the strait of Hormuz over the last 24 hours totaled 16 vessels, mostly transiting through the northern, Iranian-controlled transit lane, split between 10 inbound transits and six outbound transits, data from maritime security firm Windward shows. Tanker traffic totaled 12 vessels, split between seven inbound and five outbound transits, most of which took place on the northern lane, Windward data shows. The Liberia-flagged Sweden Prosperity and the Hong Kong-flagged Hestia transited the strait inbound through the southern corridor, Windward data shows. However, the Hestia has turned back following its successful inbound transit and is currently idling off the eastern coast of the UAE, data from vessel tracking service Vortexa shows. The Hestia is one of at least two China-affiliated very large crude carriers to abandon its transits through the strait of Hormuz over the last few days. The remaining five inbound transits took place on the northern, Iranian controlled lane, according to Windward. For outbound transits, a single transit took place on the US-supported southern lane, Windward tracked the Ashley which transited dark. The Ashley is laden with 469,000 bl of fuel oil it loaded at Dubai lightering area on 16 August and is currently idling off Fujirah, according to Kpler data. By Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Malaysia's FatHopes expands biofuel feedstock trucking
Malaysia's FatHopes expands biofuel feedstock trucking
Singapore, 20 August (Argus) — Malaysian waste oil aggregator FatHopes Energy has acquired additional prime movers from domestic logistics firm Hap Seng Truck to transport biofuel feedstocks, it said today. The investment will support higher feedstock volumes and continued expansion of the firm, FatHopes said. The firm's growing logistics capabilities will support its feedstock partnerships and planned 300,000 t/yr sustainable aviation fuel (SAF) and hydrotreated vegetable oil plant in Port Klang, Malaysia, said FatHopes Energy chief executive Vinesh Sinha. FatHopes this year partnered with Chinese renewable fuel consultancy and feedstock brokerage MotionEco to source 200,000 t/yr of used cooking oil (UCO) and other sustainable feedstocks from China, as well as Spanish UCO Trading for over 200,000 t/yr of feedstock globally , and with Vietnamese PetroVietnam Oil Corporation to collect over 200,000 t/yr of Vietnamese feedstocks . Argus assessed RED-certified SAF fob Strait of Malacca at $2,520/t on 19 August. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Mediterranean naphtha exports to Asia hit 4-month high
Mediterranean naphtha exports to Asia hit 4-month high
London, 19 August (Argus) — Mediterranean naphtha exports to Asia have risen to a four-month high in August, as recovering Asian petrochemical demand and supply uncertainty in the Middle East draws more barrels east, helping absorb surplus supply from a weak European market. Loadings from the Mediterranean bound for Asia have averaged 219,000 b/d so far in August, up from 126,000 b/d in July, a four-month high, according to Kpler data. Asian petrochemical producers restarted cracker operations after extended shutdowns earlier this year caused by poor margins and feedstock supply disruptions, increasing spot demand for imported naphtha. While the Middle East traditionally supplies much of Asia's naphtha requirements, ongoing tensions in the region have encouraged buyers to source cargoes further afield from the Mediterranean . The arbitrage remained open, with Mediterranean cargoes continuing to be fixed for delivery into Asia, including on LR1 tankers, a naphtha trader familiar with east-west flows said. European naphtha demand remains subdued. Record-low Rhine water levels have further restricted consumption by disrupting feedstock deliveries to inland petrochemical crackers and limiting outbound product movement. Water levels at the Kaub bottleneck fell to a record low of 17cm this month, leaving the upper Rhine largely inaccessible to barges. Crackers at Wesseling have been among the most exposed to reduced river traffic after Shell's closure of its nearby 147,000 b/d refinery increased reliance on imported feedstocks. Further south, BASF's Ludwigshafen crackers face challenges moving products and co-products by barge, while some petrochemical crackers have struggled because they rely on river water for cooling. Weaker domestic demand has left more naphtha available for export. Independently-held naphtha stocks in the ARA hub rose to 598,000t on 13 August, 74pc above levels a month earlier. Supply has been supported by high naphtha yields from lighter crude slates and strong refinery runs, participants said. Increased flows of light Mediterranean crude and CPC Blend at attractive prices have encouraged refiners to process lighter feedstocks , boosting naphtha output. European naphtha cracks against Ice Brent futures have traded at a discount for most of August, averaging about $4/bl over the past week. Naphtha cracks against prompt North Sea Dated crude have also remained firmly negative, averaging about $7/bl over the same period. European gasoline blending has given limited support for naphtha demand despite favourable margins, a gasoline trader told Argus . The gasoline-naphtha spread climbed back above $300/t over the past week, while the Eurobob oxy swap September-October spread closed at $93.75/t on 17 August, the strongest backwardation since October 2022 . Buying interest for naphtha and high-octane blending components such as reformate has slowed despite the supportive economics, limiting an alternative outlet for surplus supply, traders said. Arbitrage economics improved in recent days. The east-west naphtha swap spread, which surged to record highs during the Middle East hostilities in July before retreating, widened to $37.50/t on 19 August from $30/t on 13 August, improving incentives for eastbound movements. By Jide Tijani Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Renewable shifts in 4 nations near 1.5°C target: Report
Renewable shifts in 4 nations near 1.5°C target: Report
Edinburgh, 19 August (Argus) — Uruguay, Namibia, the Netherlands and Denmark are the only countries coming closer to achieving the annual global growth rates for renewable power capacity to 2030 needed to stay on track with limiting the global temperature rise to 1.5°C, as major emitters lag behind, according to Systems Change Lab — an initiative led by climate think-tank the World Resources Institute (WRI). No country has increased solar and wind over a five-year period at the rate needed to hit targets compatible with limiting global warming to 1.5°C, Systems Change Lab said. The Paris agreement seeks to curb the global rise in temperature to "well below" 2°C above pre-industrial levels, and pursues a 1.5°C limit. Its signatories recognised in 2023 "the need for deep, rapid and sustained reductions in greenhouse gas emissions in line with 1.5°C". Solar and wind need to account for 57-78pc of the global electricity mix by 2030, but only made up 17.4pc of global electricity generation, according to the group's State of Climate Action 2025 report. But Uruguay, Namibia, the Netherlands and Denmark achieved around three-quarters of the annual global growth rate required from 2025 to 2030. In Uruguay, wind power generation rose to 32pc of the country's mix in 2018 from 1pc in 2013 — the fastest five-year renewable energy increase globally. In Namibia, solar grew to 39pc of electricity from 6pc in 2017-22, while solar and wind power rose to 45pc of electricity generation from 14pc between 2019 and 2024 in the Netherlands, according to Systems Change Lab. In Denmark, around 60pc of the country's electricity comes from wind, the highest share globally, it said. Uruguay, Namibia, the Netherlands and Denmark accounted for 0.08pc, 0.03pc, 0.27pc and 0.07pc, respectively, of the world's total greenhouse gas emissions in 2024, according to the EU's Edgar data. In comparison, China accounted for 29pc of global emissions and the US for 11pc, according to Edgar data. Even though China and the US — the world's two largest greenhouse gas emitters — build the most renewable energy capacity each year, solar and wind account for less than one-quarter of electricity generation in both countries, it said. "Other countries have both a large population and have achieved a high share of solar and wind in their national electricity mix, like Spain 42pc, Germany 45pc and the UK 36pc, but for those three countries, the growth took place over a longer period at slower rates," the group said. Although the four countries' economies and geographies are vastly different, Systems Change Lab found that for all of them, energy security concerns — reliance on fossil fuel and power imports — helped the initial shift, while progress depended largely on long-term policies and stable investment conditions. Political support meant that the policies were maintained over a long enough period to build up a critical speed, it said. Unlike Denmark, which started earlier than the other three countries, Uruguay and Namibia did not need to rely on subsidies because renewable costs have fallen and other options were expensive, but "they still needed to implement policy reforms to ensure the private sector could supply energy at competitive prices". "Achieving real systems change will require rapid rates of growth in solar and wind to be achieved and sustained in all countries," it said. "Developed countries that have greater historical responsibility for greenhouse gas emissions and greater capability to act should aim to grow renewables more quickly than the global average to accommodate other countries where a rapid shift is less feasible". By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.