MOSCOW, July 5 (RIA Novosti)
- Russian diesel transits resume via Belarus after suspension
- Russia may export up to 40 new diesel submarines by 2015
- Western Europe to face diesel deficit by 2015 -- analysts
The growing demand for diesel fuel in Europe and the mass upgrade of refineries in Russia could allow Russian oil companies to edge out their European rivals on the continent, experts polled by the Moscow News said on Thursday.
Russian oil companies' upgrade plans for their refineries will see 31 premium gasoline and 30 diesel fuel plants put into operation by 2015, allowing domestic oil companies to boost diesel fuel exports and reduce crude oil sales.
Russian oil companies have adjusted their sales mixes in favor of diesel fuel, which is expected to boost revenues to $70 billion by 2020, while adding $20 billion to state coffers. These policies will reduce the profitability of European refineries and may lead to their bankruptcy, Russian experts said.
Diesel fuel exports by Russian companies could double by 2020, from the current 37 million tons, or half of Europe’s overall consumption, to some 70 million tons, Raiffeisen Bank analyst Andrei Polishchuk said.
The Russian oil companies’ focus on building up diesel fuel exports to Europe is justified, Finam Management asset manager Roman Besedovsky said, adding the Russian market was saturated with diesel products while diesel consumption in Europe was growing faster than any other fuel due to its cost effectiveness.
The share of automobiles with diesel fuel engines in Europe is over 60 percent compared with just 5-7 percent in Russia and is expected to grow further in the future as “the complex economic situation will force European to be even more economical,” Besedovsky said.
Not all experts agree Russia has a clear field for the European diesel market, however, with Middle East producers also keen to get in on the higher margins for diesel in Europe.
"There are lots of refineries being built in the Middle East to get in on this opportunity," said a former refinery manager in London on condition of anonymity. "They can see which way the wind is blowing."
If a lot of major competitors enter the market and drive diesel refining margins down, that could be critical for Russian producers, he said. "It's all about how quickly they (the Russians) do it. If they leave it too late and the Middle East ramps up diesel output, the margins will go down again."
Add to blog
You may place this material on your blog by copying the link.
Islamic terrorism is gaining momentum, and is all about ideological opposition to European Christian values. This is an aggressive young radical ideology that attracts followers across the world. And it will only grow stronger on the world political stage.