RIYADH: The ongoing conflict in the Middle East is expected to have a greater impact on refined petroleum products such as jet fuel and diesel than on crude oil itself, according to Goldman Sachs.
In its latest report, the financial services company said the conflict has already undermined the Arabian Gulf’s ability to export refined oil products, particularly European jet fuel and Asian naphtha.
About 60 percent of crude oil exports from the Arabian Gulf are medium-heavy crude, mainly used for producing jet fuel and diesel. There are not many alternative producers of these refined products outside the Middle East, making it a challenging situation.
“Prices have rallied much more for many refined products than for crude, with Singapore and North-West Europe jet fuel prices setting all-time highs above $200 per barrel last week,” said Goldman Sachs.
It added: “While we see the largest direct effects from the hit to Arabian Gulf refined products exports for European jet fuel and Asian naphtha, severe disruptions in medium-heavy crude supplies pose large downside risks to global production of diesel, jet fuel, and fuel oil.”
