8 – 10 March 2022 | Rotterdam Ahoy

Eugene Lindell.

Senior Crude Market Analyst, JBC Energy

Eugene Lindell has been with JBC Energy for well over a decade and headed both the Downstream and Upstream research teams at different points in his career. He is currently taking a more active role in consulting and business development. JBC Energy is one of the world’s leading independent oil and gas market research centres providing clients with analytical reports, market studies and data.

Mr. Lindell has been using his vast knowledge of energy markets to advise national and international oil and gas companies as well as government-related agencies around the world for many years. He is a crude oil pricing expert and for many years supported some of the world’s largest oil producers in setting their monthly selling prices. He is also the lead editor and writer of JBC Energy’s Bottom of the Barrel publication that focuses on dirty products and bunker fuels.

Apart from his research and consulting work at JBC Energy, Mr. Lindell is a regular trainer at the JBC Energy Academy, passing on his insights in the oil markets to the company’s many clients. He also taught an oil-related course at South Korea’s Ulsan National Institute of Science and Technology. On a daily basis, Mr. Lindell contributes to nearly all of JBC Energy’s reports and uses his extensive knowledge of the energy industry to guide both seasoned and junior analysts alike.

Prior to his work at JBC Energy, Mr. Lindell spent several years working in an intelligence cell at NATO regional headquarters in Brunssum, the Netherlands.

Your questions answered.

Based on this oversupply in Asia, would you expect exports of distillates to the Atlantic in new VLCC’s to continue?

These will continue for non-fundamental reasons, i.e. it is common to use distillate for the maiden voyage of a VLCC because it is the only time you can do it (before dirty cargoes are loaded) and the vessel’s rate on the maiden voyage tends to be lower. It is also about positioning–there’s no crude to load in those volumes in east Asia.

What is your view on arbitrage flowsof fuel oil from ARA, towards Singapore, bu also Middle east and Africa?

Yeah, arb flows of HSFO from ARA to Singapore are down massively and we don’t expect them to recover…ever…the flow for HSFO will be almost all Transatlantic, as the spreads required to make the flow to Asia work will almost never be reached because USGC refiners will snap it up before it gets there.

HSFO to ME should occur from time to time but should be highly seasonal, i.e. a summer play. Also MED should be able to cover this primarily.

In your conclusion you mention that shipping efficiency regulations will hit VLSFO more than HSFO. Why is that?

Scrubbers are generally installed on newer capacity that already complies with low-carbon rules. The older capacity won’t have as many scrubbers installed implying that it will consume more VLSFO. As speeds are reduced, or engines replaced, in line with low carbon requirements, VLSFO demand should fall disproportionately to HSFO.

On slide 18 you show that most refinery capacity shutdowns, both confirmed and probable, are in Asia. Why is that?

The new capacity coming on stream is also largely based in ME and Asia, meaning that the competitive pressure in the East of Suez will increase, particularly in middle distillate.

Eugene Lindell