RBC’s Helima Croft: Ongoing attacks on Russian refineries are going to cause deeper problems
Speakers
Helima Croft
— Head of Global Commodity Research, RBC Capital Markets
Summary
Helima Croft from RBC Capital Markets highlights underappreciated risks from Ukrainian attacks on Russian refineries that could lead to diesel and gasoline shortages, and warns European natural gas markets face a winter crunch due to low storage and LNG competition. She also assesses that current oil prices lack urgency and Iran negotiations remain at an impasse.
- Ukraine's drone strikes on Russian refineries tighten global refined product capacity, raising risks of diesel and gasoline shortages.
- European natural gas enters winter with low storage; LNG competition and Black Sea dangers could push prices higher.
- Current crude oil prices around $70-80 are described as a 'muddle through' environment without urgent catalysts.
- Iran nuclear talks stall, with both sides far apart, adding uncertainty but no clear oil trade signal.
- Black Sea identified as the most dangerous waterway, threatening natural gas shipments.
- Refinery capacity is essentially maxed out, offering no buffer against supply disruptions.
Ideas
Russian refinery attacks tighten product markets.
Ongoing Ukrainian drone attacks on Russian refineries are causing deeper product market tightness, with no spare refinery capacity globally, raising risks of diesel and gasoline shortages.
European natural gas faces winter supply crunch.
Europe enters winter with low gas storage; competition for spot LNG cargoes between Asia and Europe could spark a bidding war if Qatari tankers remain stuck, while the Black Sea is the world's most dangerous waterway for natural gas supplies, adding upside pressure to European gas prices.
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Speakers: Helima Croft · Tickers: UGA, CRAK, UNG