January 11, 2023 oil and gas

Kuwait to increase 5-fold diesel exports to Europe to ‘offset lower flows’ from Russia


KUWAIT CITY, Jan 10: Kuwait is expected to increase the shipments of diesel to Europe fivefold from 2022 to 2.5 million tons, or approximately 50,000 barrels per day, reports Al-Qabas daily. Reliable sources said Kuwait also wants to double jet fuel sales to nearly 5 percent to Europe this year to help the European continent compensate for lower flows from Russia, according to Bloomberg. The European Union faces potential fuel pressure from February 5, with a ban on imports of refined petroleum products from Russia as punishment for invading Ukraine and the diesel prices may rise to $200 a barrel this season because the embargo could lead to a global shortage, according to Bank of America.

Bloomberg indicated that Kuwait has spent tens of billions of dollars on developing and building new refineries in recent years, pointing out that its most important investment is building the Al-Zour refinery, which is one of the largest oil refineries in the world, and is designed to process 615,000 barrels of crude oil per day

Shipped
The refinery shipped its first exports of diesel and jet fuel late last year. The source said the state-owned Kuwait National Petroleum Company’s jet fuel plans exclude any sales in the spot market, meaning the actual quantity sent to Europe could be higher than 5 million tons. The source added that the first of the three Zour pipelines, known as the trains in the industry, is operating steadily and processing more than 205,000 barrels per day. The second train is scheduled to start operating by mid-February and the third by April 2023. When the Al-Zour refinery is fully operational, this would raise the total refining capacity in Kuwait to about 1.5 million barrels per day. Analysts at JPMorgan Chase estimated that the European Union bought Russian oil products at nearly 1.3 million barrels per day as of late last year, about half of which was diesel fuel.

Al-Zour refinery processes up to 615,000 barrels of crude oil per day, as it witnessed the export of the first shipment of diesel and jet fuel at the end of last year 2022, after a delay of about 3 years in starting the commercial operation of the refinery. Bloomberg expects other Gulf oil producers, such as Saudi Arabia and the United Arab Emirates, to boost fuel exports to Europe in 2023. JPMorgan data revealed that the European Union obtains about 1.3 million barrels per day from Russian oil derivatives, about half of which are diesel.

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