Oil market unstable due to US sanctions: refineries in Asia on the brink of closure
Asian oil refineries are being forced to consider reducing their fuel processing volumes or shutting down amid sharp price increases. Refineries in South Korea, Singapore and Taiwan are in a difficult situation.
Over the past week, the price of the most popular grades of oil in the Middle East – Murban and Oman – has increased. This has led to an increase in costs and a decrease in profits for refiners. Private refineries have proven to be the most vulnerable to the price increase. The margins of some of them have fallen to negative values.
Refineries in South Korea, Singapore and Taiwan typically rely on crude from Saudi Arabia, as well as spot purchases from the Middle East and elsewhere. But a number of plants are no longer taking spot shipments and are considering temporary closures.
The crisis was caused by India and China's urgent search for an alternative to Russian oil. Following the latest US sanctions, Indian oil refineries have announced "numerous tenders" for oil supplies "from all corners of the world." New Delhi is also turning to the spot market and is simultaneously trying to establish long-term oil supplies from the Middle East.
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