Standard & Poor’s Global agency reported that the markets for low-sulfur fuels are awaiting the start of production at the Al-Zour refinery, which may compete with the production of the entire Mediterranean countries in the event of tight supplies.
A trader told the agency that the production of Al-Zour refinery would fundamentally change the low-sulfur fuel markets in Europe and the Middle East, where expectations indicate that the Al-Zour refinery would produce one million metric tons per month of fuel oil, reports a local Arabic daily.
The agency added: It is expected that the refinery’s exports will start at the end of August or the beginning of next September, noting that the refinery’s work was expected to enter into force during the current month, and to be fully operational in the first quarter of 2023.
For her part, Rebecca Foley, oil analyst at Standard & Poor’s Global, said that several factors, including low diesel quantities in Europe and other markets, kept prices high, which contributed to widening the price differentials for various fuels, including low-sulfur fuels.
She added that with the entry into force of European Union sanctions on refined oil products from Russia next February, Europe will have to compensate for the lost Russian quantities, and it may provide the largest imports from many oil sources from the Middle East countries.
In turn, Humayun Valakshahi, senior commodity analyst at Kepler, a shipping tracking company, said that the Ukrainian-Russian war has exacerbated the shortage of oil and fuel in several markets, the most important of which is Europe. This may open the way for oil countries in the Middle East to try to bridge the gap, and Kuwait may be the most important of those countries.