The latest podcast episode of Market Pulse looks beyond headline crude prices to examine how disruption across global energy markets is increasingly being felt further down the supply chain.

Nathaniel Cockburn, Head of Freight at CSC Commodities, a division of Marex, is joined by Sasha Foss, Energy Analyst, to discuss the disruption around the Strait of Hormuz and why the most significant pressures are emerging in refined products rather than crude.

 

The conversation explores the growing supply constraints in diesel and middle distillates, changing global trade flows, alternative shipping routes, strategic reserves and the wider network of geopolitical and weather-related choke points affecting energy markets.

 

Why are refined products under greater pressure than crude?

 

While crude production has increased in the Americas and flows through the Middle East have partially recovered, refined-product markets remain significantly more constrained.

Diesel and other middle distillates are particularly exposed, while product export restrictions, high refinery utilisation and disrupted shipping routes are limiting the market’s ability to respond.

For refiners and other businesses exposed to energy markets, this creates a more complex risk environment. where the availability and cost of moving products can be just as important as the underlying crude price.

 

Key takeaways

 

• Refined products are under greater pressure than crude, particularly diesel and middle distillates.
• Energy trade flows are changing, with buyers diversifying away from traditional sources and routes.
• Refinery utilisation is creating additional risk, as high run rates and delayed maintenance could increase the likelihood of outages.
• Freight is increasingly important, with longer routes, vessel availability and higher freight costs changing the economics of energy flows.
• Choke points are multiplying, from the Strait of Hormuz and Red Sea to the Panama Canal and European waterways.
• The next phase could look very different, with increased production potentially creating a significant crude surplus if geopolitical disruption eases.

 

 

CSC, a division of Marex, provides market access, liquidity and risk management solutions across the energy complex