Middle East crude oil exports recover, but high freight rates squeeze Asian refining profits
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AT A GLANCE
Middle East crude oil exports continue to recover, but high transportation and insurance costs are squeezing Asian refiners' profits.
Article
Middle East crude oil exports recover, surging freight rates leave Asian refiners struggling with profitability
BlockBeats News,October 19 Middle East crude oil exports continue to recover, but soaring transportation and insurance costs are sharply squeezing Asian refiners' profits. HiLo Analytics data show that Asian refiners' average gross profit per barrel is approximately 40 USD, and after deducting approximately 33 USD in freight costs, net profit is only approximately 7 USD, with freight consuming approximately 82%of gross profit; by comparison, the proportion for refiners on the U.S. Gulf Coast and in Northwestern Europe is only approximately 16%.
On the supply side, Kpler data show that September Middle East crude oil exports rebounded to 15400000 barrels per day, approximately 90%of pre-war levels; Asian October crude oil imports are expected to reach 23500000 barrels per day, the highest level since February this year. However, Iran's attacks on oil tankers in the Strait of Hormuz continue to drive up freight and insurance costs, with transportation costs on some routes reaching several times their pre-war levels.
To attract Asian buyers, Middle Eastern oil-producing countries have been forced to substantially cut crude oil prices, with some discounts reaching as much as 30 USD per barrel, but trading price for volume remains insufficient to offset logistical cost pressures. If refiners further reduce operating rates or shift to other crude oil sources, the recovery in Middle East exports may be hindered again.
Original link https://m.theblockbeats.info/flash/372557
Key points
01
BlockBeats October 19 Reports indicate that Middle East crude oil exports continue to recover.
02
HiLo Analytics data show that Asian refiners' average gross profit per barrel is approximately 40 USD, after deducting approximately 33 USD in freight costs, net profit is approximately 7 USD。
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The article states that freight consumes approximately 82%of Asian refiners' gross profit, while the proportion for refiners on the U.S. Gulf Coast and in Northwestern Europe is approximately 16%。
04
Kpler data show that September Middle East crude oil exports rebounded to 15400000 barrels per day, approximately 90%。
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The article states that Asian October crude oil imports are expected to reach 23500000 barrels per day, the highest level since February this year.
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The article states that some Middle Eastern crude oil discounts are as high as 30 USD per barrel, but this still cannot offset logistical cost pressures.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
After purchasing crude oil, refiners must bear transportation and insurance expenses. The article's data show that, of approximately 40 USD in gross profit per barrel for Asian refiners, approximately 33 USD is absorbed by freight costs, leaving only approximately 7 USD. Therefore, even as Middle East export volumes recover and selling prices decline, Asian refiners still face substantial cost pressures.
Why it matters to readers
If transportation and insurance costs remain elevated, Asian refiners may reduce operating rates or purchase crude oil from other sources, and the recovery in Middle East crude oil exports may also be impeded.
Beginners should closely monitor freight rates, insurance costs, Asian refinery utilization rates, and Middle Eastern crude oil prices; a rebound in export volumes does not necessarily mean refiners' profits will improve in tandem.
Risks and unknowns
The material does not provide original data links from HiLo Analytics and Kpler, so the relevant figures cannot be independently verified on that basis.
Asia October Daily 23500000 The import volume per barrel is an estimate, and whether it will be achieved remains uncertain.
The article's claims that Iran attacked oil tankers in the Strait of Hormuz and that costs on some routes reached several times their pre-war levels lack further evidence.
It remains uncertain whether refiners will cut utilization rates or shift to other crude oil sources.
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Gross profit
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