• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 1 hour Let's shut down dissent like The Conversation in Australia
  • 1 min Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 2 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 3 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 1 hour Trump Accidentally Discusses Technology Used In The Border Wall
  • 10 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 8 hours Donald Trump Proposes Harnessing Liberal Tears To Provide Clean Energy
  • 15 hours Drone attacks cause fire at two Saudi Aramco facilities, blaze now under control
  • 8 hours Saudis Confirm a Cruise Missile from Iranian Origin
  • 8 hours Saudis Buying Oil From Iraq
  • 21 mins Hong Kong protesters appeal to Trump for support.
  • 1 day China Faces Economic Collapse
  • 1 day Democrats and Gun Views
Can Oil Survive The Looming Economic “Ice Age?”

Can Oil Survive The Looming Economic “Ice Age?”

A wide-spread economic recession is…

The Biggest Week In 50 Years For Oil

The Biggest Week In 50 Years For Oil

Oil markets saw the biggest…

Undeterred By Refinery Losses, Standard Chartered Doubles Down On Energy

Standard Chartered

UK lending giant Standard Chartered Plc announced on Wednesday that it had increased the amount of loans to oil refineries by 24 percent as of the end of June over 2015 levels.

Standard Chartered, who has already seen billions in losses from its energy sector loans, is doubling down in the energy industry to the tune of $7.3 billion in outstanding loans to the oil refinery segment alone.

The lender, who is focused largely on emerging markets and therefore commodities, said their reason for the increase in oil refinery loans was due to the “broadly steady” profit margins during the period, which likely seemed logical, because in late 2014, downstream margins were great thanks to the crash.

Unfortunately, the recent Q2 reporting season shows that the current excess of gasoline stockpiles has caused a deterioration of Q2 refining margins across many players in the industry, including majors such as BP, Exxon Mobil, and Total SA.

For BP, Q2 2016 refining margins were the weakest in six years.

In 2015, Standard Chartered posted more provisions against bad debt than HSBC Holdings, Plc—a bank four times its size—or a staggering 87% increase in bad debts. Then in February 2016, it was announced that Standard Chartered had experienced its first full-year loss since 1989—largely due to the oil price rout.

Related: 6 Signs The Big Global Switch To Solar Has Already Begun

According to Standard Chartered’s annual report for 2015, $9.6 billion of its loans were to oil and gas producers, $7 billion to oil service companies, and $5.9 billion to refineries.

According to its Half Year Report 2016, Standard Chartered said that loan impairment doubled in the first half of 2016 over the last half of 2015, “primarily in the Oil & Gas and Metals & Mining sectors. We are continuing to proactively manage our commodity exposure.”

The report further explains that “89 per cent or $7.2 billion of the net exposure to clients can sustain an oil price of $30 per barrel for 12 months or to global majors or large SOEs.”

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play