1. China-Russia Relations Continue To Improve
- The visit of Chinese President Xi Jinping to Russia this week highlighted increasing volumes of energy trade between the two countries as the latter was shunned by Europe.
- February Chinese customs data shows that China’s crude oil imports from Russia rose to an all-time high of 2.01 million b/d, equivalent to almost 20% of all incoming oil.
- Having already risen 42% year-on-year, steadily overtaking second-largest supplier Saudi Arabia, Russian exports into China are set to grow even further as state-owned refiners ramp up their buying.
- The Putin-Xi meeting was notably silent on commercial terms for Power of Siberia 2, with Gazprom saying they want to clinch the deal by year-end and start delivering gas by 2030.
2. Premium Gasoline Prices Spin Away from Regular Trends
- The spread between premium and regular keeps on widening as refiners across the Atlantic Basin are scrambling to get enough octane to produce high-quality gasoline.
- As refiners now have to produce summer-quality gasoline, meaning they need to cut down on butane content and increase the share of more expensive alkylates and reformates, the costs are ballooning.
- Apart from higher feedstock costs, US producers are also mandated to comply with Tier 3 regulations that require lower sulfur content in gasoline, meaning gas needs to be hydrotreated more severely, lowering the end product’s…