Gasoline refining margins in Asia and Europe fell on Monday to near one-year lows due to oversupply from key exporters and swelling inventories at major hubs, traders and analysts said. Profits from gasoline and diesel processing are key to oil majors' and refiners' earnings and tend to fall when oil prices rise, making feedstock more expensive.
Oil prices rallied to $70 per barrel last week on worries about a US attack on Iran. Benchmark Singapore margins for 92-octane gasoline against Brent crude fell to $3.73 per barrel on Friday, the lowest level since January 21, 2025, LSEG data showed.
In Europe, physical Eurobob gasoline barges traded at a $6.19 premium to Brent crude at the end of last week, their lowest since March 2025, according to LSEG data.
By contrast, in the United States, margins held strong due to weather. "Market is getting oversupplied with China, India, South Korea and Japan all adding exports to the market," said Pankaj Srivastava from Rystad Energy consultancy.
Asia's gasoline margins have fallen more than 77 per cent from their November peak of $17.71 per barrel, when they rose on tight supplies amid turnarounds at European and US refineries. Asia's largest gasoline exporter India supplied about 1.2 million tonnes (10.3 million barrels) of the fuel in January, up from December's 820,000 tonnes, as refiners such as Reliance's Jamnagar raised runs, according to ship-tracking data from LSEG.
In Europe, gasoline stocks have risen due to low exports to the US market in recent weeks due to competition with US blending components, according to Sparta Commodities' analyst Philip Jones-Lux.
As a result, European traders put gasoline in storage to resell it later at a profit, as March prices are higher than prompt February contracts. European gasoline supply will continue to exceed demand once Nigeria's Dangote refinery finishes maintenance at its gasoline unit this week, analysts at LSEG said in a note.
(Reporting by Mohi Narayan and Seher Dareen; Editing by Florence Tan, Janane Venkatraman and Lisa Shumaker)
