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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Hormuz tanker traffic unchanged after US‑Iran deal
Hormuz tanker traffic unchanged after US‑Iran deal
London, 15 June (Argus) — Vessel traffic through the strait of Hormuz has not changed since Sunday's announcement of a US-Iran peace deal , based on AIS tracking data. This suggests shipowners are waiting for the planned signing on 19 June and further details before attempting transits. The Indian LNG tanker Disha passed through without incident near Iran's Larak island. But the transit was likely pre-arranged and not the result of the newly announced deal. Several smaller vessels also transited, in line with recent traffic levels. There were no significant movements of crude or product tankers overnight. US president Donald Trump said on 14 June that he has authorised the "toll-free" reopening of the strait. But Iranian officials have yet to confirm that vessels can transit without restrictions. Transits continue to use shipping lanes near Iran's Larak and Qeshm islands rather than the traditional central route, reflecting ongoing safety risks in the strait. "The threat of mines in the area remains a concern immediately as well as further down the line, and mine-free routes need to be established," said Jakob Larsen, chief safety and security officer at industry association Bimco. "We still consider it very risky to commence transits at this point," Larsen added. Floating mines pose a significant risk and are likely to result in restrictions from marine insurers on which routes are covered. UK prime minister Keir Starmer said the UK will continue to work with partners to support reopening of the strait, including through a defensive, independent multilateral mission led by the UK and France, particularly to support mine clearance operations. Uncertainty over access to the waterway remains. Trump has a history of overstating progress in reopening the strait of Hormuz, through which about a fifth of global oil flowed before the Iran war. He wrongly claimed in April the strait was "completely open", prompting a buildup of crude and product tankers before many were turned back. The deal is set to be signed on 19 June, which participants said could be a trigger for any broader rebound in vessel traffic. More than 500 ships remain in the Mideast Gulf, and Bimco estimates it could take several weeks for all to leave, particularly as most will need to use restricted routes until mine clearance operations are completed. By John Ollett Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US-Iran agreement to end hostilities 'complete'
US-Iran agreement to end hostilities 'complete'
Washington, 14 June (Argus) — President Donald Trump on Sunday said an agreement with Iran was "now complete", as he ordered an end to the US naval blockade against Iran in conjunction with what he said would be the opening of the strait of Hormuz. "I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade," Trump wrote in a post on Truth social at 5:29pm ET (21:29 GMT). "Ships of the World, start your engines." Iran's deputy foreign minister Kazem Gharibabadi said the agreement will kick off a 60-day period of further negotiations, which would include the removal of all sanctions against Iran, the handling of Iran's nuclear program, economic reconstruction and mechanisms to implement the agreement, according to Iran's semi-official Tasnim news agency. Trump announced the deal despite a flare up in hostilities between Hezbollah and Israel earlier in the day and last-minute concerns from Iranian leaders about the US' ability to deliver on its commitments. The official signing of the deal will be on 19 June in Switzerland, said Pakistani prime minister Shehbaz Sharif, who has been facilitating negotiations between the US and Iran. Mediators will hold meetings this week laying the groundwork for technical talks and the official signing, he said. "Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon," Sharif wrote in a post on social media. Ice Brent crude futures started sliding on the news in early Asian hours. The front-month contract was trading at $83.88/bl as of 21:34 GMT, down by more than 3pc than in the end of Friday 12 June. It remains unclear if tankers and other commercial vessels that have been stuck in the Mideast Gulf for months would be able to immediately start crossing the strait of Hormuz, portions of which have been mined. Although Trump said he authorized the "toll free" opening of the strait, Iranian officials have yet to commit that ships can cross the strait without adhering to requirements they have attempted to impose on maritime traffic. Trump has a history of overstating progress in reopening the strait of Hormuz, through which about a fifth of global oil flows. He wrongly claimed in April the strait was "completely open". Earlier on Sunday, an Israel military strike against what Israel's Defense Forces claimed was a "Hezbollah command center" in Lebanon threatened to upend Trump's push for rapid progress on a deal to end the war, which the US and Israel started on 28 February. Iran's parliamentary speaker Mohammad Bagher Ghalibaf, in a social media post, said the "incursion" indicated the US "either lacks the will to fulfill its commitments or the ability to do so." Trump said in a post on social media that the attack "should not have happened", particularly because an agreement was so close. The terms of the deal released so far are similar to those imposed under the Joint Comprehensive Plan of Action nuclear deal negotiated in 2015 under former president Barack Obama. Trump administration officials say despite the similarities to the prior deal, their approach was preferable. "The huge difference is we did this from a position of strength. President Trump led with military might," US defense secretary Pete Hegseth said during an interview with CBS News on Sunday. "We can snap the blockade [against Iran] back at any point and they can't do anything about that." By Chris Knight and Andrey Telegin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US DOE: Roughly 7mn b/d moving through Hormuz
US DOE: Roughly 7mn b/d moving through Hormuz
Houston, 12 June (Argus) — About 7mn b/d of crude and oil products are moving through the strait of Hormuz, US energy secretary Chris Wright said today, but other industry sources dispute that figure. The 7mn b/d is "a rough average of where we are right now, and it's rising," Wright said at the Bloomberg Energy Security Executive Briefing in Houston, Texas, Friday. The number is about half of the 14mn b/d gap in supply caused by the de facto closing of the waterway since the start of the war, which also saw several million barrels a day diverted through regional pipelines, Wright said. A very large crude carrier (VLCC) carries 2mn bl of crude so Wright's estimate is equivalent to about 3.5 VLCCs a day. But oil major Chevron's chief executive Mike Wirth, who spoke later at the same event, raised doubts about Wright's 7mn b/d estimate. "It's probably not quite that much," Wirth said. "There are ships that have been transiting out, typically with transponders off, typically at night, and with some support from the US military," he added. The US' claims come at a time when visible commercial traffic through the waterway fell to some of its lowest levels since the conflict began. Mideast Gulf crude exports through the strait in June have averaged between 226,000-330,000 b/d, according to vessel tracking data from Kpler and Vortexa, but those figures likely undercount the total because vessels are turning their Automatic Identification System data while in the region to avoid attention. Maritime consultancy Windward data shows such "dark" transits through Hormuz have averaged four vessels across all segments per day this week, although those figures could include ships other than crude and refined products tankers. Prior to the war's start an average of 130 ships passed through the strait daily.Mideast and crude flows were about 14mn-15mn b/d. Mideast Gulf exports of energy, fertilizer and other commodities have been heavily limited since the start of the war in Iran, which has used the threat of attacks and naval mines to restrict traffic through the strait of Hormuz. The US and Iran are closing in on a deal to end military hostilities, even as they spar over the terms of an agreement that President Donald Trump says could be signed soon. But even if a deal is close to being signed, ship operators remain reluctant to send their tankers through the strait because of the high risk to seafarers, and will likely need to see sustained stability in the region for transits to meaningfully rebound to anything near pre-war levels. Since the war started, there have been 46 vessel attacks with 14 seafarer deaths, according to the International Maritime Organization (IMO). In its latest Short-Term Energy Outlook the US Energy Information Administration said it does not expect Hormuz traffic to recover to pre-war levels until at least early 2027. Trump said on Wednesday that the US military has been facilitating the transit of oil tankers through the strait. The US Navy is not actively escorting vessels through the strait of Hormuz, but is helping to "coach" vessels through a corridor south of the typical strait of Hormuz traffic lanes that cuts through Omani territorial waters, according to marine insurer Skuld. By Eunice Bridges and Nicholas Watt Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Energy transition must 'reflect national circumstances'
Energy transition must 'reflect national circumstances'
Sao Paulo, 12 June (Argus) — The roadmap for the transition away from fossil fuels being drafted by the UN Cop 30 climate summit's presidency will "reflect diverse national circumstances", the Cop 30 presidency said on Friday during the Bonn climate talks. The roadmap — which was first proposed by Brazilian president Luiz Inacio Lula da Silva during Cop 30 , held in Brazil last November — will consider "different levels of socioeconomic development, energy access, fossil fuel dependency and capacity to transition", among other factors, the Cop 30 presidency said. The roadmap has so far received input from 115 countries and 247 non-state actors, the presidency said. The Cop 30 presidency has so far identified four main levers to accelerate the roadmap's implementation: Reforming the international financial architecture, which would include linking debt-relief mechanisms to the transition away from fossil fuels and increasing access to concessional finance and global carbon markets; Strengthening capacity-building, enabling technology sharing, in particular in transportation, supporting innovation in hard-to-abate sectors and increasing energy efficiency and electrification rates; Implementing regional and global cooperation mechanisms to reform international trade and legal framework for investments, and foster producer-consumer dialogue; Prioritizing the just transition, particularly for fossil fuel-dependent economies, by addressing competing development priorities, with information integrity and building trust across countries at different stages of development. During the meeting, a representative from the International Renewable Energy Agency agreed that electrification will be key to the global transition away from fossil fuels. The topic is set to take center stage during Cop 31, which will be held in Turkey in November, as that country has proposed a global goal for electricity to reach 35pc of global final energy consumption by 2035 as part of its action agenda. Some of the main barriers encountered so far for the transition away from fossil fuels are "structural imbalances in the global financial architecture, insufficient de-risking mechanisms and continued international finance flows towards fossil projects", the Cop 30 presidency added. The presidency has also found that the concentration of clean energy supply chains, the high-cost nature of nascent, hard-to-abate solutions, and limited technology sharing, as well as the absence of dedicated transition coordination mechanisms, also hinder the transition. Other factors such as insufficient political leadership, geopolitical uncertainty and armed conflicts — such as the Iran war — and outdated legal and trade frameworks are also hurdles for the transition. "The recent geopolitical crisis has shown very clearly how fossil fuels are linked to vulnerabilities, and we need to address this in the roadmap," Cop 30 president Andre Correa do Lago said. But the roadmap's implementation will be much easier than other climate negotiations, he added. "The great advantage of implementation is that we have much more freedom to implement than to negotiate," he said. "Negotiation requires consensus; implementation does not." The Cop 30 presidency expects to unveil the roadmap during Cop 31. It is also working on a roadmap to address deforestation, which it will also unveil at Cop 31. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.