Latest news with #petrochemicals
Reuters
3 days ago
- Business
- Reuters
US ethane exports to China hit new roadblock with licence requirement
SINGAPORE/HOUSTON, May 30 (Reuters) - Chinese purchases of U.S. ethane, a key petrochemical feedstock, face fresh uncertainty after the Commerce Department told exporters to seek licences to export to China, according to trade sources and shipping data. Washington ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a licence and revoked licences already granted to some suppliers, Reuters reported on Wednesday. The move is the latest disruption in Chinese purchases of U.S. ethane, which hit a record of 492,000 barrels per day in 2024, or nearly half of U.S. exports, according to the U.S. Energy Information Administration. Early last month, China increased levies on imports of U.S. goods to 125% but waived the tariff for petrochemical producers who rely on the United States. for almost all their ethane imports. At least two Very Large Gas Carriers were waiting at U.S. ports to load ethane this week while 13 more tankers are headed to, or waiting off, the U.S. Gulf Coast to load about 460,000 metric tons of ethane in June, Kpler data showed. "It's going to be a major issue if all exports are suspended," said a Chinese ethane importer, who sought anonymity because he is not authorised to speak to media. "We are cautiously watching if exporters can obtain new export licences soon." VLGC Pacific Ineos Grenadier was supposed to load ethane for Ineos at Enterprise Products Partners' (EPD.N), opens new tab Morgan's Point terminal at La Porte, Texas, has docked there since last Friday, Kpler and LSEG data showed. Stl Qianjiang is anchored near Energy Transfer's (ET.N), opens new tab Nederland terminal, due to load ethane for Chinese petrochemical firm Satellite Chemical, the data showed. Enterprise, Energy Transfer and Ineos did not immediately respond to requests for comment outside office hours while Satellite Chemical could not be reached for comment. "The market disruption could be immediate," Julian Renton, an analyst at East Daley Analytics, said in a note. A trade source said Ineos, which also buys ethane for its plants in Europe, may divert its cargo there. In a a filing Enterprise, a top handler of ethane and butane, said it was evaluating its procedures and internal controls and could not determine if it would be able to get a licence. Traders said there may be limited near-term impact on Chinese operators, as they have sufficient stocks. East Daley's Renton said if the restriction holds, Chinese petrochemical plants could face critical feedstock shortfalls, while projects may stall. Chinese petrochemical firms use ethane as a cheaper feedstock alternative to naphtha, while U.S. oil and gas producers count on China to buy their natural gas liquids as domestic supply exceeds demand. Shares of ethane importers Satellite Chemical ( opens new tab were down 3.1% on Friday, while Wanhua Chemical ( opens new tab stock lost 1.3%.
Zawya
5 days ago
- Business
- Zawya
Saudi's refining boom helps it weather oil price war: Bousso
(The opinions expressed here are those of the author, a columnist for Reuters.) LONDON - Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports. The world's top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil. Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia. The kingdom's domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI). The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom's flexibility between directly selling crude to other refiners and refining it itself. Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics. Saudi's refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround. FLEXIBILITY This integrated strategy offers Saudi Aramco, the country's national oil company, an effective way to manage oil price volatility as refining margins - the profit made by processing crude oil into transportation fuels and chemicals - typically rise when feedstock prices decline. It will likely prove valuable going forward after OPEC+, an alliance of major producing countries unofficially led by Riyadh and including Russia, started to rapidly unwind 2.2 million bpd of output since April. The move to add a large volume of oil into an already well-supplied market concerned by the impact of U.S. President Donald Trump's tariffs on global economic activity put heavy pressure on oil prices, which dropped to around $65 a barrel from a high of $82 in mid-January. Saudi Arabia and its allies will likely deepen the price war when they meet later this month by further accelerating the unwinding of their production cuts. Refining margins have held strong so far this year despite the growing economic headwinds, benefiting from lower crude prices and healthy demand for diesel in particular. Benchmark Singapore refining margins are currently near their highest since February 2024 of around $8 a barrel, according to LSEG data. Regardless of the possible impact of the trade wars, global fuel demand in the northern hemisphere typically peaks from June through early September, as motorists drive more over the summer while more air travel buoys jet fuel demand. This will therefore likely support refining margins in the coming months. Saudi Aramco placed 28% of its crude oil production in domestic refining operations in 2024, up from 26% the previous year, according to its annual report. It also supplied 53% of the crude used by its joint venture refineries abroad. The International Monetary Fund assessed that Saudi Arabia will need an average Brent oil price of around $90 a barrel in order to balance its national budget. While crude prices are likely to remain at current levels or even lower for most of the year given the surge in supplies and demand uncertainty, the increased refining operations offer Riyadh an effective tool to manage oil price volatility and to better withstand a protracted price war. ** The opinions expressed here are those of the author, a columnist for Reuters. ** Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here. (By Ron Bousso; Editing by Susan Fenton)
Reuters
6 days ago
- Business
- Reuters
Saudi's refining boom helps it weather oil price war: Bousso
LONDON, May 27 (Reuters) - Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports. The world's top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil. Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia. The kingdom's domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI). The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom's flexibility between directly selling crude to other refiners and refining it itself. Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics. Saudi's refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround. This integrated strategy offers Saudi Aramco ( opens new tab, the country's national oil company, an effective way to manage oil price volatility as refining margins - the profit made by processing crude oil into transportation fuels and chemicals - typically rise when feedstock prices decline. It will likely prove valuable going forward after OPEC+, an alliance of major producing countries unofficially led by Riyadh and including Russia, started to rapidly unwind 2.2 million bpd of output since April. The move to add a large volume of oil into an already well-supplied market concerned by the impact of U.S. President Donald Trump's tariffs on global economic activity put heavy pressure on oil prices, which dropped to around $65 a barrel from a high of $82 in mid-January. Saudi Arabia and its allies will likely deepen the price war when they meet later this month by further accelerating the unwinding of their production cuts. Refining margins have held strong so far this year despite the growing economic headwinds, benefiting from lower crude prices and healthy demand for diesel in particular. Benchmark Singapore refining margins are currently near their highest since February 2024 of around $8 a barrel, according to LSEG data. Regardless of the possible impact of the trade wars, global fuel demand in the northern hemisphere typically peaks from June through early September, as motorists drive more over the summer while more air travel buoys jet fuel demand. This will therefore likely support refining margins in the coming months. Saudi Aramco placed 28% of its crude oil production in domestic refining operations in 2024, up from 26% the previous year, according to its annual report. It also supplied 53% of the crude used by its joint venture refineries abroad. The International Monetary Fund assessed that Saudi Arabia will need an average Brent oil price of around $90 a barrel in order to balance its national budget. While crude prices are likely to remain at current levels or even lower for most of the year given the surge in supplies and demand uncertainty, the increased refining operations offer Riyadh an effective tool to manage oil price volatility and to better withstand a protracted price war. ** The opinions expressed here are those of the author, a columnist for Reuters. ** Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here.
Zawya
7 days ago
- Business
- Zawya
Kuwait PIC, China's Wanhua Chemical Group sign deal to boost cooperation
KUWAIT - The Petrochemical Industries Company (PIC), a subsidiary of Kuwait Petroleum Corporation (KPC), signed a Memorandum of Understanding (MoU) on Sunday with Chinaآ's Wanhua Chemical Group to strengthen bilateral cooperation in the petrochemical sector. The memorandum was signed at the Ahmad Al-Jaber Oil and Gas Exhibition by PIC CEO Nadia Al-Hajji and Wanhua Chemical President Kou Guangwu, in the presence of Yantai government representative, Vice-mayor Yu Shengtao. This agreement marks a new step in the partnership between the two companies, building on a strategic agreement signed in April under which PIC acquired a 25 percent stake in several Wanhua petrochemical plants in Yantai, China. The memorandum aims to enhance collaboration across various areas, including research and development, value chain development, and expanding market reach in high-growth regions. Al-Hajji noted that this partnership aligns with PICآ's 2040 strategy of smart investments and sustainable growth, highlighting the dedication of both teams in turning plans into actionable steps. Kou Guangwu emphasized the mutual benefits of the partnership, stressing its role in fostering innovation and operational excellence to support economic growth in both countries. The Chinese delegation also toured the Ahmad Al-Jaber Exhibition, where they learned about Kuwaitآ's oil industry history, exploration, production, storage, transport, and downstream operations. All KUNA right are reserved © 2022. Provided by SyndiGate Media Inc. (
Asharq Al-Awsat
7 days ago
- Business
- Asharq Al-Awsat
Kuwait, China Sign MoU to Enhance Cooperation in Petrochemical Sector
The Petrochemical Industries Company (PIC), a subsidiary of Kuwait Petroleum Corporation (KPC), signed on Sunday a memorandum of understanding (MoU) with China's Wanhua Chemical Group to enhance cooperation in the petrochemical sector. The agreement was signed by PIC CEO Nadia Al-Hajji and Wanhua Chemical President Qu Guangguo at the Ahmad Al-Jaber Oil and Gas Exhibition. The signing ceremony was attended by Yu Xingtao, a representative of the Chinese government in Yintai, PIC said in a statement published by Kuwait's state-owned news agency, KUNA. The MoU aims to open new avenues for collaboration in key areas such as research and development, integrated value chains, and market expansion into high-growth regions. It also builds upon a broader strategic agreement signed between the two companies in April, which included Wanhua Chemical's acquisition of a 25% stake in a cluster of petrochemical plants in Yintai, China. Al-Hajji noted that the facilities involved in the agreement specialize in producing high-value petrochemical products, saying the partnership will invigorate the sector and foster stronger industrial cooperation between the two nations. She emphasized that the collaboration is designed to generate added value and mutual benefit. Al-Hajji said the newly signed MoU marks the beginning of a deeper partnership aligned with PIC's 2040 strategic vision, which emphasizes smart investments and planned expansion. She commended the efforts of the joint working teams from both sides, who, through months of dedication and professionalism, successfully translated strategic plans into actionable milestones. For his part, Qu Guangguo affirmed that the visit underscores the growing relationship with PIC, highlighting the MoU's role in promoting innovation, operational excellence and economic growth in both countries. In April, PIC said it has signed an agreement to acquire a 25% stake in China's Wanhua Chemical Group. The agreement includes specialized industrial units to produce Propylene Oxide (PO), Tertiary Butyl Alcohol (TBA), Acrylic Acid (AA), Butyl Acrylate (BA) and several other products, contributing to the diversification of the company's high-value product portfolio.
