Most refineries globally are operating near capacity to meet rising demand as they recover from the pandemic and make up for lost Russian supplies.
JPMorgan analysts estimate that Russia has cut between 500,000 and 700,000 barrels per day of oil product exports, because it now finds marketing fuel more difficult than marketing crude oil.
"Unless new production capacity emerges in the Middle East more quickly than we expect, or if China decides to raise its export caps, the shortage of petroleum products will worsen as the demand for transportation fuels increases during the Northern Hemisphere summer," they said in a statement.
On Tuesday, China released the first batch of product export quotas aimed at reducing soaring domestic inventories, which rose as demand slumped due to epidemic shutdowns.
Despite recent additions to quotas, volumes are still significantly lower than they were last year.
Markets News :
EUR leads, JPY lags on the day
European equities lower; S&P 500 futures up 0.94%
US 10-year yields up 3.3 bps to 3.00%
Gold down 0.34% to $1,846.53
WTI crude up 0.76% to $120.72
Bitcoin down 6% to $30,234