The Middle East’s initial response to a tightening global middle distillates market has been muted, with exports from the region dropping to their lowest levels since July 2020 in February and March.

Global distillate inventories have dropped well below five-year average levels and with economic activity increasing – albeit at a slower pace than envisioned by the IMF in January (MEES, 22 April) – and demand therefore rising, distillate crack spreads have widened dramatically. Inventories have been declining since mid-2021 “and are currently at their lowest level since at least 2017,” according to a 12 April note by consultancy FGE. (CONTINUED - 811 WORDS)