In Singapore, Asia’s oil-pricing hub, margins for complex refineries fell to near parity last week, with yields hovering below seasonal averages for weeks
ASIAN oil refiners hit by lean margins are baulking at Saudi’s latest price hike, saying the kingdom raised prices by more than expected to reflect Iranian supply risks.
State-owned Aramco increased its flagship Arab Light oil official selling price for November to Asia by 90 cents month-on-month, versus an expected 65-cent rise based on a Bloomberg survey.
Refiners said the hike has made the grade pricier than competing Middle Eastern sour varieties in the spot market, though recent threats to Iranian exports are likely to maintain China’s interest in Saudi barrels.
Asian refiners have been particularly jittery in recent days about rising tensions between Israel and Iran’s proxies as the region takes the bulk of exports from the Persian Gulf producer, which amounted to 1.7 million barrels a day last month.
Any disruption to Iranian flows will be detrimental to China’s private refiners, also known as teapots, which have been able to stay competitive against regional rivals thanks to the heavily-discounted imports.
In addition to higher Saudi OSPs, refiners also pointed to rising ship-charter rates and an overall strengthening in global benchmarks as factors adding to feedstock costs, further weighing on profits. In Singapore, Asia’s oil-pricing hub, margins for complex refineries fell to near parity last week, with yields hovering below seasonal averages for weeks.
Daily rates for very-large crude carriers rose more than 30 per cent last week on concerns that Israel could target Iranian ships off the nation’s main export facility.
Globally, Brent is up almost 10 per cent this month as geopolitical risks swelled and traders extended their bullish positions in the markets. BLOOMBERG
