Refining: Rerouting Russian Products Slashes Margins in Asia

Russia was still exporting some 3 million barrels per day of refined products in April against all expectations. Discounted products ending up in Asia-Pacific and the Mideast added to regional surpluses. Yet China limited exports to a nine-month low in April, which should tighten that region, while rising Chinese demand could keep exports lower going forward. India continues to run and export at full-tilt, with many products ending up in Europe. Russian product flows deflated refinery margins for diesel, naphtha and fuel oil in Asia — except for units in China and India that can buy discounted crude from Russia.