Refineries Opt Out Russian Crude Imports as Furnace Oil Prices Slide Globally
12.27.2023 By Tank Terminals - NEWS

December 27, 2023 [PT Profit]- Hydro skimming refineries in Pakistan primarily produce 55 percent of furnace oil from Russian crude oil, focusing on high-speed diesel and petrol.


Amid a global dip in furnace oil prices, local refineries are hesitating in importing Russian crude oil, as reported by The News on Tuesday, quoting industry sources.

The decreased demand for furnace oil, a by-product of Russian oil, has rendered the current pricing of Russian crude impractical for Pakistan’s hydro-skimming refineries.

One source highlighted the need for a discounted price on Russian crude oil, given the reduced feasibility in the current market where furnace oil prices have plummeted from $80 per barrel to $60 per barrel since early December.

Hydro skimming refineries in Pakistan primarily produce 55 percent of furnace oil from Russian crude oil, focusing on high-speed diesel and petrol.

Facing a surplus of furnace oil, local refineries are actively seeking opportunities to sell in the global market as domestic demand for the fuel has dwindled. Industry officials expressed concerns about the impracticality of importing Russian crude oil when there is already a substantial quantity of furnace oil available for export at lower prices.

Notably, the economic suitability of Russian crude oil for countries like India, with deep conversion refineries emphasizing diesel and petrol over fuel oil, was mentioned by another source.

In an effort to manage their surplus, refineries have exported significant quantities of furnace oil in December. Pakistan Refinery Limited (PRL) exported 35,000 tonnes, Cnergyico exported over 70,000 tonnes, and Pak Arab Refinery (PARCO) exported 100,000 tonnes of fuel oil in the current month, according to industry sources.

December sales data indicates a 34 percent decrease in fuel oil sales compared to the same month last year and a 33 percent drop from November this year. The deal between Pakistan and Russia for the supply of Russian crude oil was signed earlier this year, with the first order placed in April.

PRL, which imported its initial 100,000-tonne cargo of Russian crude oil in June, has no plans for further imports by March next year, according to a top official.

Cnergyico Refinery imported two shipments totaling 110,000 tonnes of Russian crude oil in October and November. The current market dynamics and furnace oil surplus contribute to the cautious approach of local refineries towards further Russian crude oil imports.


Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

PetroVietnam Gas to Launch LNG Trucking Business
03.04.2024 - NEWS
March 4, 2024 [LNG Prime]- PetroVietnam Gas, a unit of state-owned PetroVietnam, will this month ... Read More
Three Firms Join Forces on $3.3 Billion LNG-to-Power Project in Philippines
03.04.2024 - NEWS
March 4, 2024 [LNG Prime]- Power companies Meralco PowerGen, Aboitiz Power, and San Miguel Global... Read More
OPEC+ Members Extend Oil Output Cuts to Second Quarter
03.04.2024 - NEWS
March 4, 2024 [Reuters]- OPEC+ members led by Saudi Arabia and Russia agreed on Sunday to extend ... Read More
Russia Says to Deepen Oil Output Cuts While Easing Export Limits
03.04.2024 - NEWS
March 4, 2024 [Reuters]- Russia will cut its oil output and exports by an additional 471,000 barr... Read More