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By Robert Harvey and Georgina McCartney
London/Houston (Reuters) -The trade tariffs of US President Donald Trump for Canadian and Mexican oil imports offer European and Asian refineries a competitive advantage over their US rivals, analysts and market participants told Reuters.
Trump ordered 25% tariffs for Canadian and Mexican imports and 10% for goods from China on Saturday, starting on Tuesday to combat a national emergency via fentanyl and illegal foreigners to the USA, said the White House official. Energy products from Canada have only 10%, but Mexican energy imports are calculated a full 25%, they said.
The tariffs for the two largest sources of raw imports in the United States will increase the costs of the heavier raw food grade US aggregates for optimal production, according to the industry sources, their profitability and potentially forced production cuts.
This offers refineries the opportunity to compensate for the difference in other markets. The United States is currently an exporter of diesel and importer of petrol.
“Fewer US diesel exports would support the European margins, while more exporting options can remain on the heavily under pressure,” said David Wech, the chief economist from Advice Vortexa.
“Overall, positive for European refineries, but probably not for European consumers,” he added.
“European margins can improve because the northeast of the United States has to import more gasoline,” said a manager for a broker. “I think European and Asian refineries are the big winners.”
The tariffs would probably also force the raw sellers at discount prices to find buyers, said Matias Togni, founder of the Analytics company Next Barrel. Asian refineries are well ready to absorb this reduced Mexican and Canadian crude oil, which could also form their profit margins, he said.
Asian refineries could achieve the competitive advantage because they have the equipment to operate heavy raw materials and increase at the same time, said Randy Hurburun, head of the refining of energy aspects.
The trans -mountain pipeline expansion (TMX) in Canada, which was launched last May, means that the pipeline can now send an additional 590,000 barrels to the Canadian Pacific coast a day.
Higher TMX programs to China could replace imports from Venezuela and Saudi Arabia, according to trade sources.
Asia-Pacific refineries could also take advantage of the arbitrage options of the fuels to the west coast of the United States, which may be made by higher output costs by the procurement of crude oil from the further abfer, added the Wech from Vortexa.
