Asian Oil Refiners Mull Run Cuts, Closures as Crude Costs Soar.

A surge in the cost of physical crude cargoes as China and India rush to replace Russian flows is prompting refiners in other parts of Asia to consider cutting run rates, according to traders.

Oman crude and Abu Dhabi’s Murban, the most-referenced Middle Eastern grades, have jumped over the past week, showing how the impact of the Jan. 10 US sanctions on Russia are rippling through the global energy market. This has pushed up feedstock costs for processors and eroded margins, which have even gone negative, the traders said.

Merchant refiner margins have dropped from between $2 and $3 a barrel to a small loss, they said. Gross refining margins in Singapore, a benchmark for Asia, fell to minus 65 cents this week from as high as $3.75 earlier this month, S&P Global Commodity Insights data show.

Source: FINANCE.YAHOO