Refineries are forced to pay record premiums for an alternative to Middle Eastern oil
The global energy market is facing a new challenge: oil refineries around the world are being forced to pay record premiums to find alternative sources of raw materials. This is reported by Bloomberg.
The main reason for this situation was a significant reduction in oil supplies from the Middle East, which forced refiners to urgently look for a replacement to ensure the smooth operation of their facilities. Due to the shortage of familiar grades and increased risks, the cost of barrels from other regions, which by their characteristics can replace Middle Eastern oil, has jumped to historical highs.
Market experts note that the situation is complicated not only by the physical shortage of raw materials, but also by logistical difficulties. Changing routes and the need to charter additional tankers to transport oil from the Atlantic basin or the USA significantly increase the cost of the final product.
For many refineries, whose technological lines are configured for a specific type of oil, the choice of alternatives is limited, which puts them in a weak position during negotiations and forces them to accept suppliers’ conditions of extremely high premiums to the base price of Brent.
The increase in costs for purchasing raw materials inevitably puts pressure on the refining margin. Experts predict that if the trend towards maintaining high premiums continues, this may lead to an increase in the price of finished petroleum products, in particular diesel fuel and gasoline, for end consumers.
Currently, the situation remains tense: oil refiners are forced to balance between economic feasibility and the need to fill tanks in order to avoid stopping production in an unstable global market.
