Gasoline: Indian companies to restart refining Russian crude oil

The differentials for MR-size cargos on an FOB basis were unchanged in Northeast Asia. No fresh talks were heard for April loading cargoes. Supply of crude oil was not certain, and oil companies in Northeast Asia could not fix their export schedules in April. In the other regions, at least one cargo for March loading by Reliance Industries in India was reportedly scheduled to be transported to Singapore. According to a market source, the oil firm seemed to have a plan to sell cargoes for loading in late March or later.

The US government announced early this month that India would be permitted to purchase Russian crude oil for 30 days. It was heard that a part of Indian companies would buy Russian crude oil and refine it. According to a market participant, there were tankers that were floating on the sea with Russian crude oil, so that Indian oil companies could easily secure crude oil in tankers from those tankers.

The differential for SR-size cargoes of 90RON gasoline on an FOB South Korea basis went up. One South Korean company sold one SR-size cargo of 90RON gasoline loading during the end March and early April at a premium of $6.00/bbl to the quotations on an FOB South Korea basis. This cargo was scheduled to be transported to Japan. A market participant pointed out that the differential would become even wider going forward because supply/demand fundamentals were tight in Asia including Japan.

Naphtha: Reductions considered one after another, supply remains tight

The second-half April open-spec naphtha prices on a CFR Japan basis went up. Supply from the Middle East was stopping, so that end-users in Asia were concerned about a shortage of feedstocks. One Chinese petrochemical company mentioned that supply term contracts of naphtha remained suspended.

In the Middle East, several refineries such as the Sitra refinery in Bahrain and the Ruwais refinery in UAE were attacked. A market participant mentioned "it will take time for the refineries to restore productions and supplies after tankers could go thorough the Strait of Hormuz.

Formosa Petrochemical Corp in Taiwan conducted a buy tender for naphtha or LPG via a tender closed on Friday. The company was heard to procure LPG.

In talks on ethylene in Northeast Asia, China's SP Chemicals sold two 3,000mt cargoes for loading in March and April on Wednesday and Thursday. According to a market participant, the awarded price was heard at around $1,250/mt for March loading and at around $1,350/mt for April loading on an FOB basis. Both cargoes were scheduled to be exported, not for the domestic market. However, destinations were expected to Japan.

Middle distillates: CPC to buy Jet fuel for April delivery

The differentials for MR-size cargoes of jet fuel on an FOB basis were stable in Northeast Asia. CPC Co in Taiwan closed a tender to buy an MR-size cargo for delivery on Apr 8-25 with its price validity date set on next Monday. Some traders speculated that it could be done at a premium of above $30/bbl to the quotations on an FOB basis. The company was also planning to reduce operations of its refineries from next week as arrivals of crude oil were delayed. Prices in Asia stood higher than those in other regions. Thus, cargoes that had been supposed to be headed to the US were being bought back to Asia. Indian cargoes to be loaded in late March were also brought into Asia.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB basis in Northeast Asia were unchanged. Some buyers in Australia, another buyer of oil products, were moving to shift its sources of oil cargoes to the US. A market source said that the US Oil Major had already arranged to send two MR-size cargoes loading in late March. Another company was also reportedly moving to buy cargoes loading in April from the US Gulf.

Fuel oil: 0.5% sulfur prices go up on FOB Korea on tight supply

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis went up. Sense of tight supply was getting strong in the spot market. Petroleum companies in Northeast Asia including South Korea prioritized supply for the domestic market and refrained from selling fuel oil cargoes. Sales were not seen from major supply sources, and inflows of fresh cargoes decreased to Asia.

The 650,000b/d Dangote refinery in Nigeria had finished turnaround of the residue fluid catalytic crackers (RFCC) in mid-February and sales of low sulfur fuel oil were expected to decrease. The 615,000b/d Al-Zour refinery stopped supply due to the tension in the Middle East.

Under the situation, buyers rushed to Singapore because of concerns over supply of bunker oil going forward. As reported before, many suppliers in Fujairah declared force majeure on the back of shortage of fuel oil. For this reason, a lot of shipping companies increased bunkering in Singapore.