Regional product markets short-term outlook August 2022

This update incorporates all of the regional crude runs and product-by-product supply-demand balances through to end-2023 on a regional level. For this update, we have adjusted our Q1 2023 outlook to reflect the likely volatility as the market adjusts to the full implementation of the EU’s ban on Russia crude and refined products. Our broader view for 2023 remains, with the expectation that Russian product exports continue to clear as new markets emerge in LATAM, Africa and Asia for barrels originally clearing into Europe. This is underpinned by the view that discounts for Russian-origin products widen significantly from current levels and the EU’s ban on shipping insurance and services has a limited impact on the availability of cargos to move Russian-origin products. However, we fear the initial transition to be very volatile.