Saras eyes opportunities under Vitol ownership

Market: Crude oil, Oil products
31/07/24

Trading firm Vitol plans to run Italian refiner Saras' 300,000 b/d Sarroch refinery as a standalone business, separate from its other downstream assets, Saras chief executive Franco Balsamo said today at the firm's second-quarter results.

Vitol completed a deal to buy a controlling stake in Saras from the Moratti family in June. Under Italian law, the firm was then obliged to launch a takeover bid for the remaining shares.

"What Vitol intends to do is to work with us to develop the business to help us better understand the commodity markets, to create some new ideas in order to manage inventories. Saras is a complex refinery and what we are expecting is the contribution of Vitol can be a big opportunity for us to exploit all our capabilities," Balsamo said.

Saras expects refining margins to remain at current levels throughout the rest of the year, with chief operating officer Marco Schiavetti saying they will remain "above historical averages". The firm acknowledged that gasoline and diesel margins in the Mediterranean had recently come under pressure from new refining capacity. Nigeria's 650,000 b/d Dangote refinery began ramping up its crude intake in the second quarter, with cargoes of its light products reaching the Mediterranean.

Saras said Sarroch's run rate averaged 265,000 b/d in January-June, identical to Argus' assessment of throughput in the period. The refinery underwent work on its crude distillation capacity and an alkylation unit in the second quarter and will probably have some "minor maintenance" in the fourth quarter, Balsamo said. Saras now expects its throughput for 2024 to be in the range of 265,000-270,000 b/d, slightly lower than its forecast at the start of the year.

Saras swung to a profit of €31.3mn ($33.8mn) in the second quarter from a loss of €16.8mn in the same period last year. Significant maintenance work and a narrowing of heavy-light crude spreads weighed on the firm's profitability in the second quarter last year.

By Adam Porter

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Viewpoint: Road auctions may buoy Brazil asphalt demand

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Viewpoint: European jet may struggle to find support

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02/01/25

Viewpoint: European jet may struggle to find support

London, 2 January (Argus) — European jet fuel prices weakened over the course of 2024, and support is difficult to see in the coming year. Outright jet fuel values in Europe averaged $802/t between January and November, with the highest prices between February and April. In the second half of 2024 prices fell, to average $721.50/t in November, down by almost 18pc from January and even more compared with the November 2023 average of $921.50/t. In December, values for delivered jet fuel cargoes often dropped to below $700/t ( see graph ). Jet fuel supply to Europe ramped up in 2024, and was consistently strong throughout the year . This peaked in August-September, coinciding with the fall in prices. Large developments in Middle Eastern refinery capacity caused the increases in supply. Refining margins for jet fuel in Europe are likely to remain underwhelming. Argus Consulting estimates jet fuel premiums to North Sea Dated to average around $13/bl in 2025, compared with $20.53/bl in the first 11 months of 2024 and $29.30/bl in 2023. Weaker overall refining margins have led to capacity closure plans in 2025, so imports will probably compose a greater proportion of European jet fuel supply in the coming years. Eurostat data for January-July 2024 show a 0.7pc year on year rise in EU jet fuel demand. Argus Consulting calculates European jet fuel demand was 1.5pc up on the year for all of 2024. Flights across the Eurocontrol network totalled more than 9.44mn in January-November, higher by more than 10pc from the same period in 2023. Most areas in Europe have now equalled or surpassed pre-pandemic flight levels. Yet strong supply seems to have outstripped rising demand in 2024, and market participants expect the same in 2025 even though Middle East and Indian refiners now say arbitrage economics to Europe are closed . With northwest European jet fuel holding its narrowest premium to Singaporean jet fuel in three years, more jet has been shipped east in recent months. Since late November, Singaporean values have even surpassed those in Europe. But market participants do not expect serious tightness in European supply. Even air traffic growth may not proportionally raise European jet fuel demand in the coming year, as sustainable aviation fuel (SAF) mandates now require at least 2pc blending in the EU and UK, as of 1 January. European SAF prices fell by more than 30pc between January and November ( see graph ), as SAF supply and refining capacity grew ahead of the mandate. Increasing mandates in the coming years may weigh further on fossil jet demand. Crucially, however, suppliers only need to include 2pc SAF in all jet fuel over the course of the year, not immediately. This means many European suppliers will continue to use 100pc fossil jet fuel until the early part of 2025 at least. Some market participants have confirmed they intend to do this, while the relevant SAF infrastructure, logistics and administration are finalised. Fossil jet fuel balances may therefore be little changed early in 2025 — although if suppliers blend less than 2pc SAF at first, they would need to blend more than that later in the year, using accordingly less fossil jet at that point. Increasing fuel efficiency of aircraft has been pressuring European jet fuel demand. But Boeing and Airbus are heavily delayed in their delivery of newer, fuel-efficient aircraft. Boeing had 4,750 unfulfilled orders of its 737 MAX aircraft as of late October, while Airbus lowered its commercial aircraft delivery targets earlier this year . Aviation analytics firm OAG has forecast supply of aircraft will remain tight until at least 2026. This led fuel efficiency in Europe to improve by only 1.1pc in 2024 compared with 2023, according to Argus Consulting . By Amaar Khan Jet/kerosine NWE cif $/t RED SAF fob ARA $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: USGC diesel exports may get European boost

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02/01/25

Viewpoint: USGC diesel exports may get European boost

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Viewpoint: North American BZ, SM output to dip in 2025

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Pakistan's NRL issues tender to sell January bitumen

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