Global products market weekly: Margins surge on renewed concerns of middle distillate supply as an EU import ban solidifies

The oil market rose early in the week, after EU reached an agreement on the ban of 90% of Russian oil imports. OPEC+’s decision on Thursday and news that Saudi Arabia might step in to fill for reduced Russian production triggered some weakness in prices. However, the announced 648kb/d increase in production for July and August doesn’t address the tightness in the refined product markets and prices rose by the end of the week. In the week ended 3 June, North Sea Dated crude’s weekly average increased by US$6.16/bbl. Our ex-RVO global composite refining margin increased by US$5.61/bbl to US$28.65/bbl. Margins rose as a ban on Russian waterborne imports into EU highlighted supply risks on middle distillate markets, boosting cracks. Weekly margins were at US$25.97/bbl above the five-year historical average for the same week.