Europe downstream oil in brief: United Kingdom downstream oil import infrastructure focus

In July 2018, three VLCC vessels were reported to have left Asia destined for NWE and the Mediterranean, each carrying up to 300kt of diesel. With the growing market share of diesel/gasoil imports, net 11.3Mt in 2017, the ability to import larger vessels directly into the UK from the Middle East and Asia will become increasingly attractive. Infrastructure investment in the UK downstream oil sector has focused on increasing the capability to receive and discharge larger vessels, and integration across sites with existing large import capability. This will enable traders to benefit from larger import cargoes of diesel/gasoil from Asia and the Middle East, yet potentially secure UK refined gasoline on CIF based economics. Gross fuel margins decreased in July for gasoline and diesel across most markets. With pump prices already at the highest since 2014 across a number of countries, retailers will be under continued pressure to restrict additional pump price increases.