PETALING JAYA: Asian refining margins will stay buoyant in 2022, as easing motion restrictions increase demand for transportation fuels, whereas uptake for Asian fuels from Europe has elevated attributable to worldwide sanctions on Russia, based on Moody’s Traders Service.
It famous that on the identical time, provide had fallen attributable to vital refinery closures final 12 months, coupled with decreased gasoline exports from China.
Moody’s analyst, Hui Ting Sim, mentioned robust demand for transportation fuels amid a provide shortfall would drive refining margins at the same time as a latest surge in crude costs bolsters feedstock prices.
“Refiners’ earnings will enhance this 12 months attributable to buoyant refining margins and stock good points from increased oil costs.
“Nonetheless, earnings development will likely be curbed by increased utility prices, freight prices and premiums to crude oil,” she added.
The credit standing company mentioned worldwide sanctions on Russia had restricted impact on rated Asian refiners’ operations as a result of they sourced most of their crude oil from Center Jap crude producers by way of long-term offtake agreements, Bernama reported.
Though refineries in China are extra reliant on Russian crude, state-owned firms will be capable to cope, it famous.
In the meantime, it expects earnings or money flows of refining and advertising and marketing firms in India and Indonesia to say no this 12 months attributable to worth controls.
It’s because they confronted challenges in absolutely passing feedstock prices to customers.
“Nonetheless, the deterioration within the credit score metrics of the state-owned refining and advertising and marketing firms in these international locations could possibly be accommodated of their present credit score profiles,” mentioned Moody’s.
The credit standing company additionally expects working capital outflows of refiners to rise in 2022 attributable to increased crude costs.