Russian Crude Oil Sanctions To Inflict Toluene Market
- 09-Jun-2022 5:01 PM
- Journalist: Motoki Sasaki
The tight supply of Upstream crude oil has been inflicting the Toluene prices in the global market. The Toluene market has been witnessing an upward trajectory movement this week. The demand growth from the overseas market also backed up the price hike.
The import of Russian crude oil has been sanctioned by the European Union and the US due to Russia's invasion over Ukraine. Since most of the EU countries import crude from Russia, the sanction has resulted in an increased demand for crude across the region. The insufficient availability and the tight supply of crude influenced its derivative Benzene, Toluene, and Xylene production, which further inflicted the Toluene prices. Low inventory levels coupled with high demand from the domestic and regional market triggered the Toluene pricing.
The EU-based trader reported that the increased crude oil production from OPEC could ease the tight supply and boost the downstream production. Moreover, the EU and UK's current ban on insurance and reinsurance for the tankers that carry Russia's crude to other countries can further harm the existing situation.
However, in the Asian region, the supply of crude oil has been strengthened, correlating with a strong buying sentiment across the region. Besides, the relaxing restrictions in China ushered in healthy importing activities, with high import charges. Hence, owing to the aforementioned reasons, Sinopec raised the Toluene prices in China. The Toluene market has been growing approximately by 13%, with an increment of $156/ tonne from 5th June to 9th June.
According to the ChemAnalyst database, "Toluene prices are likely to move upward in the coming weeks. EU's sanction on the insurers might skyrocket the upstream crude values and result in the tight supply of the product. Insufficient availability of the upstream crude is likely to inflict the global Toluene market. In addition, the growing demand from the downstream sectors and the limited supply of Toluene might positively impact the Toluene pricing."