US diesel exports to Europe are set to reach an all-time high this month, undeterred by loading delays caused by Hurricane Beryl earlier this month and blazing a trail to European customers despite weakening middle distillate cracks.
Platts expects the volumes of the transatlantic middle distillate trade to soar above 500,000 b/d, benefitting from Saudi Arabian exports edging lower in June-July, with Valero and ExxonMobil taking the lead.
The United Kingdom is by far the largest buyer of US diesel, accounting for roughly a third of all Europe-bound exports, followed closely by the Netherlands and Belgium, home to the Amsterdam-Rotterdam-Antwerp trading and blending hub.
Diesel cracks remain lukewarm in Europe after sliding from 28 per barrel in March to $16-17 per barrel currently, however the arbitrage remains wide open for US diesel as Gulf Coast refiners are firing on all cylinders.
2. OPEC Oil Reserves Decline as Exploration Lags Production
Global recoverable oil reserves have declined over the past 12 months, with Rystad Energy seeing a decline of 52 billion barrels year-over-year to around 1,500 billion barrels on the back of insufficient discoveries and downward adjustments in existing discoveries.
Saudi Arabia has seen the largest downward revision of any country, with proven and probable oil reserves coming in at 233 billion barrels, down 27 billion barrels.