Correction

The Gasoline Market Analysis section of the March 22, 2022 issue of Oilgram Price Report should have read as follows:

Japanese refineries halt operations due to earthquake

The Asian gasoline complex strengthened March 22, as Japan's largest refiner ENEOS' 145,000 b/d Sendai refinery in the northeast and 129,000 b/d Chiba refinery in Tokyo Bay were still closed following an earthquake.

It remains unclear when ENEOS will be able to resume operations at the Sendai and the Chiba refineries, S&P Global Commodity Insights reported March 22, citing a company spokesperson.

"It should take some time for the refineries to come back online", a trader said.

Brokers pegged the front-month FOB Singapore 92 RON gasoline crack against Brent swap in the $14.60-$14.65/b range at 0300 GMT March 22, down from $16.23/b at the Asian close March 21, S&P Global data showed.

The physical FOB Singapore 92 RON gasoline crack against front-month ICE Brent crude futures was pegged at $14.50-$14.55/b at 0300 GMT, down from $17.07/b March 21.

Crude oil futures rose in mid-morning trading, as markets remained undersupplied amid buyer aversion to Russian oil.

Gasoline demand is expected to be supported by Ramadan festivities in April, market sources said.

Indonesia was expected to import about 10 million of gasoline in April, and Malaysia was expected to import about 1 million barrels during the same period, according to sources.

Indonesia's Pertamina was seeking up to 200,000 barrels of 92 RON gasoline for loading over April 8-20 from Singapore/Malaysia/Karimun/Brunei in a tender that closed March 21 and remains valid until March 23, market sources said.

Pakistan increases imports from China in Jan-Feb

Pakistan imported 395,000 mt of gasoline from China over January-February, up 26.2% on the year, the customs data showed March 21, making it the only country to have received more fuels from China during that period.

In February alone, Pakistan received 190,000 mt of gasoline from China, up 7.2% on the year.

The increase in imports was in line with the country's growing demand. Pakistan's gasoline consumption growth is expected to be in near double-digits over the next three years due to rising auto sales, despite the push toward cleaner fuels, CEO of Pakistan State Oil Syed Muhammad Taha told S&P Global Commodity Insights in an interview.

Over the next two to three years, motor gasoline demand is expected to increase 8%-10% per annum owing to the sharp increase in economic activity, according to Taha.

In the first two months of the year, China's gasoline imports almost halved by 46.7% on the year to 1.885 million mt.

China is set to reduce its oil product exports by slashing the first batch of export quota allocations for gasoline, gasoil and jet by 56% on the year to 13 million mt for 2022, S&P Global reported earlier.

Looking ahead in March, China's gasoline outflows are more likely to fall as low as 520,000 mt amid tight export quotas, while gasoil exports are likely to recover slightly to over 500,000 mt as export margin becomes attractive, information collected by S&P Global showed.

Demand for gasoline is expected to rise within regional economies, such as Cambodia and South Korea, as the countries ease COVID-19 travel restrictions amid a pick up tourism demand.

Cambodia waived pre-entry tests, while South Korea will allow fully vaccinated travelers to enter without quarantine from April 1, according to local media.

Demand for gasoline is also expected to be supported by the upcoming Ramadan festivities in April, market sources said.

One market source estimated Indonesia would import 10 million barrels of gasoline in April, while Malaysia was estimated to import 1 million barrels in April.

Philippines top importer

China's gasoil outflows fell to multi-year lows of 197,000 mt in February, down further from 223,000 mt in January.

In February, the Philippines became the top receiver of China's gasoil at 56,000 mt.

Overall exports to the Philippines in the first two months, which amounted to 110,000 mt, however, were still down 85.9% from a year ago.

The decline came amid strict lockdown measures imposed by the Southeast Asian nation to curb the spread of COVID-19, which hurt consumption of gasoil.

Despite that, the Philippines was still the top destination for China's gasoil over January-February, and would continue to take up a large share of China's gasoil exports going forward as the country continues to ease border restrictions.

Meanwhile, South Africa received a rare cargo of 40,000 mt of gasoil in February, the first in 20 months.

NWE-USAC arbitrage open

The Northwest European gasoline market saw flat prices weaken with the crude complex March 22, while tight supply of blending components in the Mediterranean raised concerns about summer supply, sources said.

Unanimity in the EU on the topic of a ban on Russian oil imports was not reached as Germany and Hungary have rejected a proposed embargo.

Anticipation of a Russian oil ban had previously caused an uptick in crude oil futures, but a wider realization that an EU embargo would take some time brought crude futures, and consequently gasoline flat prices, lower.

The arbitrage from Northwest Europe to the US Atlantic Coast was open for summer-grade gasoline, but supply limitations due to limited refinery output in Europe has left few able to work the arbitrage, according to a Europe-based trader.

Around 93,000 mt of gasoline were expected to load in northwest Europe for export to the US Atlantic Coast in the week started March 21, up 15,000 mt on the prior week, according to Kpler shipping data.

The African Petroleum Producers' Organization conference in South Africa brought news of refinery updates in West Africa.

Angola's Luanda refinery has been undergoing maintenance to increase gasoline production since June 2019 and is expected to finish June 2022, which will increase gasoline production to 450,000 mt/year from from 72,000 mt/year.

Steep backwardation in the West African market has made it uneconomical to keep cargoes offshore for long periods of time.

"Offshore volumes have reduced drastically," a market source said.

In the Mediterranean market, naphtha, which is a key blending component used in greater proportions in summer-specification gasoline, was in tight supply due to self-sanctioning of Russian crude and refined oil products.

"The issue is the naphtha more than the gasoline blendstock. There is not enough non-Russian origin naphtha to compensate for Russian barrels," another Europe-based trader said.