Refinery attacks keep European fuel prices around record highs

• European gasoil premium to Brent futures hit an all-time high of $74.66 per barrel on Thursday, while gasoline margins reached $42.21, near a four-year high
• Saudi Arabia's Jizan refinery (400,000 bpd) shut after Houthi attacks, eliminating over 200,000 bpd of fuel exports, mostly diesel and gasoil
• Ukrainian drone attacks continue targeting Russian refineries, with Lukoil's 260,000 bpd Perm facility the latest to shut a crude distillation unit

Summary: Refinery Attacks Drive European Fuel Prices to Record Highs

European refiners are experiencing exceptional profit margins as coordinated attacks on oil refineries in the Middle East and Russia severely constrain global fuel supply. The crisis is elevating consumer and business costs worldwide despite crude oil trading around $90 per barrel—significantly below 2008's $147 record.

Key Figures and Market Data

European low-sulphur gasoil futures reached an all-time high premium of $74.66 per barrel over Brent crude on Thursday, representing diesel refining margins. Gasoline refining margins hit $42.21 per barrel on Wednesday, approaching the four-year high of $44.94 recorded July 17. European jet fuel margins exceeded $80 per barrel on July 29, down from March's unprecedented $109 peak.

Major Incidents

• Saudi Arabia: Jizan refinery (400,000 bpd capacity) shut down July 27 following Houthi attacks. The facility exported over 200,000 bpd of fuels, primarily diesel and gasoil, in the prior three months.
• Kuwait: Parts of the Al-Zour refinery (615,000 bpd capacity) closed due to power outages.
• Russia: Continued Ukrainian drone strikes forced Lukoil's Perm refinery (260,000 bpd) to shut down a crude distillation unit on Thursday. Russia has implemented fuel export bans in response.

Market Implications

Analysts warn that refining capacity constraints now pose equal or greater challenges than crude oil scarcity. The situation particularly impacts diesel—critical for industry, agriculture, and transport—as both the Middle East and Russia are major exporters. European energy sector profits are driving significant earnings growth, with second-quarter profit estimates rising to 20.8% year-over-year.