Midyear outlook: Asia-Pacific oil refining
Asian oil refiners could face stronger margin headwinds in 2H if demand slumps and crude costs spike. Sluggish China exports and industrial activity as a result of US tariffs could deliver a blow to diesel demand. Meanwhile, the availability of more affordable electric vehicles would accelerate wider adoption, weakening gasoline consumption. Escalating MiddleEast tensions could keep the price of oil higher for longer amid widening risk premiums. All these point to a slump in Asia refining margins. BI Asia-Pacific refining peers traded at 0.8x book value as of June 10, below their 10-year average of 1.1x.
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