Reuters reported a drop in profits of European refineries due to Russian oil

Due to cheap Russian oil and warm weather in Europe, Reuters estimates that profits from refining a barrel of Brent oil at a typical European refinery have fallen by about 71% since January last year.and in Asia by about 57%

Despite the sanctions imposed against Russia , the supply of Russian oil and oil products has not decreased, and because of their cheapness, European oil refineries (refineries) are suffering losses, writes Reuters.

The agency notes that due to Russian supplies to India and China , the global margin of diesel fuel has fallen by about half since February, which has affected the profits of both local and European refineries.

Thus, the Indian Reliance Industries, the operator of the world's largest oil refining complex, previously announced losses. As reasons, the company noted the stable supply of Russian diesel fuel, as well as an unusually warm winter in Europe. In addition, demand for gasoil to replace natural gas in power generation also fell after LNG spot prices declined from record highs, Reliance Industries said.

Reuters estimates that Europe's benchmark diesel barge distillation margin fell to its lowest level since February 2022 at about $13.70 a barrel last week. A similar margin in Asia fell by 31%, to its lowest level since January 2022, to about $14 a barrel. At the same time, profit from refining a barrel of Brent oil at a typical European refinery has fallen by about 71% since January last year to $3.56 per barrel, while the profitability of refining in Asia has decreased by about 57% to $2.54 per barrel. .

The EU and the G7 countries introduced a $60 per barrel price cap on Russian crude oil in December, and in February the cap was extended to include petroleum products. The Russian authorities consider the sanctions illegal. In response to these measures, Russia stopped supplying oil to countries that set a price ceiling and refocused on the Asian market. In March, China and India accounted for up to 91% of such exports, according to estimates by the analytical company Vortexa.

Meanwhile, in Asia, the Russian grade of Urals oil began to be sold at deep discounts, down to a price below cost, Reuters reported in December. In particular, the discount on Russian raw materials in India that month amounted to $12-15 compared to previous deals. The agency also wrote that recently the import of Russian diesel, naphtha and fuel oil to Singapore has increased significantly, from where these products are delivered to other countries.

U.S. Presidential Energy Security Adviser Amos Hochstein said earlier that the oil price ceiling was "working well" and energy supplies from Russia were being sold below price ceilings. At the end of March, Bloomberg reported that the majority of G7 members are against lowering the price ceiling, Brussels also considers the current ceiling to be effective.

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