Northwest European gasoline refining margins increased by 75 cents to reach $35.43 per barrel on Tuesday, climbing to heights not observed since mid-2022. Traders and market participants said tightened supply dynamics were a primary factor behind the upward pressure on margins.
Commercial activity in the physical market reflected the tighter backdrop. Shell sold roughly 6,000 metric tons of Eurobob E10 gasoline loaded on barges to Exxon and Varo, market sources reported. Separately, about 14,000 metric tons of Eurobob E5 gasoline barges changed hands, with Exxon selling volumes to Gunvor and TotalEnergies.
Policy and demand signals elsewhere added to the market narrative. In the United States, Treasury Secretary Scott Bessent publicly urged gasoline retailers on Tuesday to lower prices as the country marks its 250th birthday. He reinforced a message attributed to the President and appended a direct warning to the retail sector: "we're watching."
Data from Japan showed further signs of softening in fuel consumption. Japan's domestic oil product sales in May fell 5.2% compared with the same month a year earlier, totaling 1.98 million barrels per day. Within that total, gasoline sales edged down 0.9% to 700,436 barrels per day, indicating modest weakness in domestic demand.
In Russia, authorities may grant companies temporary permission to produce and import lower-quality gasoline and diesel, Kommersant daily reported on Monday. The move is described as a response to a fuel crisis the country is confronting in the aftermath of attacks on its refineries in Ukraine, according to the report.
India adjusted export-related tax measures, cutting windfall taxes on diesel and aviation turbine fuel exports while raising the duty on petrol exports, according to a government order. The changes modify the fiscal economics of fuel exports from India and may influence flows and availability in export markets.
Taken together, the combination of physical cargo activity in Northwest Europe, public pressure on retail prices in the United States, weaker product sales in Japan, potential quality and import measures in Russia, and fiscal changes in India underpinned a complex and interconnected set of influences on gasoline markets on Tuesday.
Market context
Physical trades of Eurobob E10 and E5 grades signaled active rebalancing of supplies across traders and refiners, while policy pronouncements and government orders in major markets added layers of uncertainty for future flows and pricing. The move in margins to $35.43 per barrel marks a notable short-term tightening in Northwest Europe.