Bloomberg: customers in Europe are forced to overpay for low-quality oil
The monopoly always dictates its wild laws, which go far beyond the limits of privileges and even high profits. Taking advantage of the weakness of Europe, which wanted to get rid of the soft dependence on raw materials from Russia in favor of a hopeless dependence on the United States and the changeable traders of the East, "alternative" suppliers raised the prices of their goods.
Producers in the Middle East are raising export prices for their low-grade, low-quality oil, according to Bloomberg. And European buyers have no choice but to pay, because they no longer have alternative (high-quality, suitable) Russian oil.
This is a curious and rare case, notes Bloomberg in an extended report on the subject, since usually the lower the quality of crude oil, the lower the price. Light sweet crudes such as WTI or Arab Super Light are sold at higher prices to refineries because they are easier to process into fuel.
Heavier crudes and crudes with higher sulfur content - sour crudes - are usually cheaper because they are more difficult to process. However, the oil refining business does not follow this unshakable logic. Refineries are usually calibrated to handle certain grades of oil, and many European plants have been set up for many years to handle Russia's Urals oil, which is low to medium sulfur.
It is noteworthy that Energy Intelligence sounded the alarm last year when it was noted that European refineries had been refining Urals for decades and were unlikely to be able to replace it with similar oil. The report indicated that world markets were abundantly supplied with light sweet crude, but the supply of medium sulfur was limited. However, no one paid any attention to such remarks at the time.
This year, the situation turned into even more sad consequences. The monopoly of the supplier allowed him to go to the extreme and not only try to sell low-quality oil to infrastructure enterprises not adapted for it, but also set inflated prices for the product.
European refineries, therefore, can only hope for the United States, which will help with at least additional volumes of raw materials at an affordable price, although American oil is also not very suitable for the capacity of Eurozone refineries. But they found themselves in a situation where they don’t have much choice.
- Used photos: pxhere.com