South Korea jet fuel differential at lowest since 2008

Market: Oil products
08/04/20

The South Korean jet fuel differential has fallen to the lowest levels since at least 2008 amid weak domestic demand caused by the impact of Covid-19 and higher exports.

The differential, or premium or discount to Singapore spot assessments for jet fuel cargoes loading from South Korea, fell to -$4/bl yesterday, the lowest levels seen since at least July 2008, according to Argus assessments. It was last assessed at a previous low of -$3.90/bl on 22 August 2008.

The coronavirus pandemic's impact on jet fuel demand has weighed on the differential. South Korean air passenger traffic in March had slumped by 84pc from pre-coronavirus levels to 1.74mn passengers. This was also the first time the monthly total fell below 2mn since records began in 1997, the Korea civil aviation association said. Flagship airline Korean Air announced more flight reductions yesterday, most of which will last until April or May.

South Korean refiner GS Caltex has sold May-loading jet fuel at around a deep $3.40-3.50/bl discount to the average of Singapore spot assessments for the whole of May, said market participants, although this could not be confirmed with the refiner. It could have sold one Long Range 2 (about 90,000t) cargo, or one 300,000 bl Medium Range (MR) cargo and one LR1 (about 60,000t) cargo, said market participants, although this could not be confirmed with GS Caltex.

GS Caltex had also previously sold seven MR jet fuel cargoes for loading in April amid weak domestic demand. This was much higher than its typical monthly offerings of one to three MR cargoes. South Korean refiner SK Energy also exported more jet fuel in April because of weaker demand. While the exact increase is unclear, SK Energy typically exports each month a total of about seven to 10 MR jet fuel cargoes under spot and term agreements,.

by Sarah Giam

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

24/04/25

Valero's Mexico fuel import permit reinstated: Update

Include market comments, details of Valero operations in Mexico. Houston, 24 April (Argus) — Independent US refiner Valero said its permit to import fuel into Mexico has been reinstated after being suspended earlier this month. The temporary suspension was imposed by Mexico's tax authority SAT on 9 April as part of the country's efforts to fight fuel smuggling, Valero said. The suspension was lifted after the company reached out to stakeholders and customs officials in Mexico and was "quickly exonerated of any wrongdoing," Valero said Thursday morning during its first quarter earnings call. Valero on 23 April sent a notice to customers in Mexico saying its import operations had resumed, but the two-week stop disrupted supply in several regions. Some cities, like Irapuato in Guanajuato state northwest of Mexico City, remain without product, according to market sources. "Although this is all unfortunate and created significant supply disruption for our customers, it is part of an effort in Mexico to limit the import of illegal fuel," Valero chief financial officer Gary Simmons said in the earnings call. Fuel smuggling is rampant in Mexico, with illicit fuel sales accounting for up to 30pc of Mexico's 1.2mn b/d of gasoline and diesel demand, according to finance ministry estimates. Most of the illicit supply enters Mexico through mislabeling oil products at the US-Mexico border as petrochemicals, additives or biofuels, which are not subject to excise taxes on diesel and regular gasoline. Earlier this month Mexico stopped the movement of all fuel trucks as part of fight against fuel smuggling. Valero top importer to Mexico Valero is the largest private fuel importer in Mexico, operating an extensive distribution network supported by its refineries in the US Gulf coast and a system of terminals, pipelines, rail routes, truck routes and waterborne logistics. Its fuel sales accounted for 10pc of Mexico's gasoline and diesel demand on 9 April, according to the company. The company imports road fuels by pipeline from its Corpus Christi and Three Rivers refineries in Texas to the 195,000 bl NuStar storage terminal in Nuevo Laredo, Tamaulipas. Valero's waterborne fuel deliveries arrive at the 2.1mn bl Sempra terminal in Veracruz, from which it supplies other terminals near Puebla, Mexico City and Guadalajara. Valero stores fuel at four private-sector terminals in Mexico, with over 4mn bl of capacity. The company is also expected to start storing fuel at the new 1.1mn bl OTM maritine terminal in Altamira, Tamaulipas, in the near future. The company operates a network of over 290 retail fuel stations in Mexico and also supplies fuel to other retailers and fuel marketers. In Mexico Valero holds gasoline, diesel and jet fuel import permits valid through 2038. Valero is one of only a handful of private-sector companies with such permits, as Shell, Marathon and ExxonMobil hold permits to import only gasoline and diesel. Private-sector companies started importing fuel into Mexico in 2016 after the market opened to more competition, but under former president Andres Manuel Lopez Obrador's administration, the energy ministry (Sener) cancelled dozens of fuel import permits. By Eunice Bridges and Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Valero's Mexico fuel import permit reinstated

24/04/25

News

24/04/25

Valero's Mexico fuel import permit reinstated

Houston, 24 April (Argus) — Independent US refiner Valero said its permit to import fuel into Mexico has been reinstated after being suspended earlier this month. The temporary suspension was imposed by Mexico's tax authority SAT on 9 April as part of the country's efforts to fight fuel smuggling, Valero said. The suspension was lifted after the company reached out to stakeholders and customs officials in Mexico and was "quickly exonerated of any wrongdoing," Valero said Thursday morning during its first quarter earnings call. Fuel smuggling is a rampant problem in Mexico, with illicit fuel sales accounting for up to 30pc of Mexico's 1.2mn b/d of gasoline and diesel demand, according to finance ministry estimates. Most of the illicit supply enters Mexico through mislabeling oil products at the US-Mexico border as petrochemicals, additives or biofuels, which are not subject to to excise taxes on diesel and regular gasoline. Earlier this month Mexico stopped the movement of all fuel trucks as part of fight against fuel smuggling. In Mexico,Valero holds gasoline, diesel and jet fuel import permits valid through 2038. Valero is one of only a handful of private-sector companies with such permits. Shell, Marathon and ExxonMobil hold permits to import only gasoline and diesel. Valero is the largest private fuel importer in Mexico. On 9 April, its sales accounted for 10pc of Mexico's gasoline and diesel demand, according to the company. Private-sector companies started importing fuel into Mexico in 2016 after the market opened to more competition, but under former president Andres Manuel Lopez Obrador's administration, the energy ministry (Sener) cancelled dozens of fuel import permits. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Eni cuts capex on macro headwinds, tariff uncertainty

24/04/25

News

24/04/25

Eni cuts capex on macro headwinds, tariff uncertainty

London, 24 April (Argus) — Italy's Eni has cut its spending plans for this year in response to macroeconomic headwinds, uncertainty around trade tariffs and a lower oil price outlook. The company is planning a series of "mitigation measures" worth over €2bn [$2.28bn], a key element of which is a reduction in 2025 capex to below €8.5bn from previous guidance of €9bn. Eni now expects net capex — which takes into account acquisitions and asset sales — to come in below €6bn this year, compared with its initial plan of €6.5bn-7bn. Other savings will come from "mitigating actions" around its portfolio, operating costs and "other cash initiatives", the firm said. Eni's plan reflects a tariff-driven deterioration in the outlook for the global economy and, in turn, global oil demand and oil prices. The company has revised its Brent crude price assumption for 2025 down to $65/bl from $75/bl previously. It has also lowered its refining margin indicator assumption for the year to $3.5/bl from $4.7/bl. The lower oil price assumption has not changed the company's upstream production forecast — it still expects 2025 output to average 1.7mn b/d of oil equivalent (boe/d). But Eni's production in the first quarter was only 1.65mn boe/d, 5pc lower than the same period last year. The firm's gas production took the biggest hit, falling by 9pc on the year to 4.5bn ft³/d (861,000 boe/d) as a result of divestments and natural decline at mature fields. Liquids output fell by 1pc year on year to 786,000 boe/d. Eni reported a profit of €1.17bn for January-March, 3pc lower than the same period last year. Underlying profit— which strips out inventory valuation effects and other one off-items — fell by 11pc on the year to €1.41bn. Eni said the fall in profits was mainly due to lower oil prices. The company also had to contend with weaker refining margins and throughputs, as well as a continuing downturn in the European chemicals sector. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Taiwan’s CPC buys Vincent crude ahead of CDU turnaround

24/04/25

News

24/04/25

Taiwan’s CPC buys Vincent crude ahead of CDU turnaround

Singapore, 24 April (Argus) — Taiwanese state-controlled refiner CPC has purchased a rare cargo of Australian heavy sweet Vincent crude, ahead of a June crude distillation unit (CDU) turnaround that is expected to tighten blendstock component availability at its refinery. CPC recently bought the end-May loading Vincent from Japanese trading firm Mitsui at around a $5-5.50/bl premium to North Sea Dated, traders said. Vincent is usually sold in volumes of 550,000 bl. An upcoming CDU maintenance at a CPC refinery in June, expected to last 1-2 months, will limit production of other blendstock components needed for fuel oil production, market sources told Argus . It is unclear which refinery — the 200,000 b/d Taoyuan or 400,000 b/d Dalin — is having the maintenance. Production constraints, arising from the upcoming turnaround, may have prompted CPC to seek alternative blendstocks like Vincent to help meet its fuel oil supply obligations during this period. CPC is responsible for supplying the majority of Taiwan's bunker fuel at domestic ports. The Vincent deal marks CPC's first crude purchase from Australia since November 2023, when it received heavy sweet Van Gogh crude, data from oil analytics firm Vortexa show. Van Gogh is similar in quality to Vincent. The last time CPC took Vincent was in March 2023. CPC has mainly relied on US light sweet WTI in the past year, supplemented by medium sour Saudi Arab Light and Abu Dhabi Upper Zakum. Vincent and Van Gogh, as well as Australian heavy sweet Pyrenees, are valued as blendstocks for very low-sulphur fuel oil production in the Singapore strait region. These grades' heavier density relative to other sweet crude grades make them less economical for refining, and better suited for direct use in fuel oil blending. By Asill Bardh and Reena Nathan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Pemex Olmeca refinery exports first diesel cargo

23/04/25

News

23/04/25

Pemex Olmeca refinery exports first diesel cargo

Mexico City, 23 April (Argus) — Mexico exported its first ultra-low sulphur diesel (ULSD) cargo from state-owned Pemex's 340,000 b/d Olmeca refinery, according to vessel tracking data and market sources. The MR tanker Torm Singapore loaded 300,000 bl of ULSD at the Dos Bocas port on 28 March. It discharged about 40,000 bl at Seaport Canaveral near Orlando, Florida, Kpler data shows. The remaining 260,000 bl were discharged at the Yabucoa port in Puerto Rico. The Olmeca refinery began construction during the former administration of president Andres Manuel Lopez Obrador and was symbolically inaugurated in 2022, but has faced multiple challenges and start-up woes since. Its initial construction costs have doubled to over $17bn. Olmeca started producing ULSD last year , using a distillate feedstock produced at the 190,000 b/d Madero refinery, as Olmeca's crude distillation unit has faced multiple delays. The refinery is still in a testing phase in 2025. It processed about 6,800 b/d of crude in February, Pemex latest data show. Olmeca was originally touted as a key component of the government's desired road fuels self-sufficiency policy. But Pemex's trading arm PMI has also studied lucrative ULSD export opportunities in Florida, the Caribbean and Central America, market sources told Argus . These areas depend heavily on imported diesel and face infrastructure constraints. Earlier in March, Pemex shipped internally about 280,000 bl of gasoline from Olmeca to ports in Veracruz, according to Kpler Data. Olmeca's most viable domestic fuel distribution routes remain tank trucks and vessels, which could then discharge in other terminals on Mexico's east coast. Olmeca's limited domestic fuel sales are made directly to area fuel retailers from southern Veracruz and Tabasco, who send trucks directly to the terminal for loading, according to market sources. By Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more