Overview
Northwest European gasoline refinery margins dropped $3.64 on Monday to settle at $20.58 a barrel, as a jump in underlying crude values compressed refinery profitability in the region.
Physical market activity remained visible in the Argus trading window. About 8,000 metric tons of E5 gasoline barges were traded, with Trafigura and Equinor identified as sellers to Shell. In addition, roughly 3,000 metric tons of E10 gasoline barges transacted, with Petroineos selling to Van Raak, and an assessed lot of 1,000 tonnes also reported.
Drivers of the move
Oil prices climbed by more than $6 per barrel on Monday following a report from Iran’s Tasnim news agency stating that Tehran’s negotiating team had stopped exchanging messages with the United States. The report also said Iran and an allied grouping it described as the "Resistance Front" were considering measures to completely block the Strait of Hormuz and to choke other waterways, including the Bab el-Mandeb Strait. The resulting crude spike raised feedstock costs for refiners and reduced margins on gasoline output.
Trade flows and export data
European gasoline and blending component exports from the EU-27 and the UK also eased, adding downward pressure to values. Kpler data showed exports averaged 811,000 barrels per day in March, down from an average of 954,000 barrels per day in April. That decline in outbound flows coincided with the fall in refinery margins.
Implications for the regional fuel chain
The margin decline reflects how an abrupt rise in crude costs can compress refinery economics even when physical transactions continue to occur. The reported barge trades indicate ongoing liquidity in the gasoline cargo market, but the margin contraction highlights a narrower window of profitability for gasoline processors in Northwest Europe.
Data points in this article are drawn from assessed trades, reported market windows and Kpler export data as reported on Monday.