Goldman Sachs expects the largest oil market shock on record—triggered by the war in the Middle East—to have a greater impact on refined products such as jet fuel and diesel than on crude oil itself.
“Prices have rallied much more for many refined products than for crude,” Bloomberg reported, citing two analysts at Goldman Sachs.
The severe disruptions seen in supplies of so-called medium-heavy crude pose the risk of lower production of diesel, jet fuel and fuel oil, they said.
The medium and heavy crude—typically used to produce jet fuel, diesel and fuel oil—accounts for nearly 60% of the Gulf region’s usual crude exports, while alternative supplies outside the Middle East remain extremely limited, they added.
Although oil prices have risen more than 40% since the war eruption, some refined products have increased even more sharply. Fuel costs have nearly doubled in parts of Asia, while South Korea has joined China and Thailand in imposing export restrictions to protect domestic markets.
Goldman Sachs expects the largest oil market shock on record—triggered by the war in the Middle East—to have a greater impact on refined products such as jet fuel and diesel than on crude oil itself.
“Prices have rallied much more for many refined products than for crude,” Bloomberg reported, citing two analysts at Goldman Sachs.
The severe disruptions seen in supplies of so-called medium-heavy crude pose the risk of lower production of diesel, jet fuel and fuel oil, they said.
The medium and heavy crude—typically used to produce jet fuel, diesel and fuel oil—accounts for nearly 60% of the Gulf region’s usual crude exports, while alternative supplies outside the Middle East remain extremely limited, they added.
Although oil prices have risen more than 40% since the war eruption, some refined products have increased even more sharply. Fuel costs have nearly doubled in parts of Asia, while South Korea has joined China and Thailand in imposing export restrictions to protect domestic markets.
