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US may halt exports of petroleum products this autumn — expert

Strategic reserves in the US are dwindling, and a new decision on releasing stocks to balance the market may be required in 78 days, Andrey Polishchuk said

MOSCOW, August 20. /TASS/. The US could halt exports of petroleum products in two months if restrictions in the Middle East remain in place, Andrey Polishchuk, senior oil and gas industry analyst at Eiler, told TASS.

"If exports from the Middle East remain limited, the US could slow the pace of stock releases or even halt exports in two months," he said.

The situation in the Middle East and the ban on supplies of petroleum products from Russia led to a sharp rise in crack spreads (the difference between the price of crude oil and the petroleum products derived from it) in Europe, the expert said. Against this backdrop exports from the US increased, ultimately resulting in anomalous crack spreads in the US. Moreover, China has begun ramping up oil imports, thereby boosting global demand for oil.

Strategic reserves in the US are dwindling, and a new decision on releasing stocks to balance the market may be required in 78 days, he added. "It would entail higher risk as inventories are gradually approaching minimum operational levels. In such a scenario, decisions might be made to release reserves more cautiously to mitigate risks. Furthermore, restrictions on the export of petroleum products to ensure domestic supply could be a logical step, especially if some US refineries undergo scheduled maintenance in the autumn," Polishchuk explained.