Global products market weekly: A wild ride for oil prices - product cracks skyrocket as supply disruptions highlight shortage in global middle distillates

Oil prices surged as fears of a supply crunch gripped the market. Oil majors announced plans to exit from their operations in Russia and an increasing number of banks imposed trading restrictions on Russian materials early in the week, adding difficulty for market players to secure cargoes. Prices eased after, with news of US and Iran closing in on reviving the 2015 nuclear deal and OPEC+ meeting concluding with an increase its output as planned. IEA announced a release of 60 million barrels oil reserves in a bid to quell supply concerns, but prices ended the week higher. North Sea Dated crude’s weekly average rose by US$13.62/bbl, in the week ended 5 March. Our ex-RVO global composite refining margin strengthened by US$3.86/bbl to US$7.90/bbl, shrugging off losses from last week as product cracks sharpened to reflect a global shortage in middle distillates despite increases in crude prices. Weekly margins were US$4.59/bbl above the five-year historical average for the same week.