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illuminem summarizes for you the essential news of the day. Read the full piece on Reuters or enjoy below:
🗞️ Driving the news: Global shortages of heavy crude oil are driving up costs for industries reliant on this key raw material, such as shipping and road construction
• Recent cuts in Mexican oil exports and a rerouting of Canadian supplies to the Pacific are exacerbating the scarcity in the Atlantic basin
🔭 The context: The shortfall in heavy crude is compounded by ongoing OPEC production cuts and sanctions on major producers like Venezuela, Iran, and Russia
• This situation is putting pressure on refineries, particularly those designed to process heavier, sour crudes which are now facing soaring input costs
🌍 Why it matters for the planet: The increased costs of heavy crude could lead to higher operational costs and potentially more emissions as industries struggle to find affordable, suitable alternatives
• This shift affects everything from maritime shipping routes to the materials used in infrastructure projects.
⏭️ What's next: With the global crude market trending towards lighter, sweeter oil due to OPEC's strategies and other geopolitical factors, heavy crude may continue to be a premium commodity
• This could force refineries and related industries to adapt operations or seek out new sources of heavy crude
💬 One quote: "The lack of heavy sour crudes goes directly against refinery profitability and it is a waste of capex for complex refineries," said Patricio Valdivieso, vice president of oil market analysis at Rystad Energy
📈 One stat: Medium and heavy-sour crudes made up only 26% of Europe's crude imports in the first four months of 2024, the lowest level since at least 2012
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