Soaring Freight Rates Give US Refiners Edge As Crude Discounts Widen

Soaring freight rates for oil tankers are giving US refiners an edge as discounts on heavy crude grades widen due to the Iran conflict, according to industry sources and data from Refinitiv.

The cost of shipping crude oil from the Middle East to the US Gulf Coast has surged, making it more profitable for refiners to process heavier crude grades that are cheaper due to wider discounts.

This dynamic is benefiting US refiners, which are well-positioned to take advantage of the discounted heavy crude grades, while putting pressure on European and Asian refiners that rely more heavily on lighter crude grades.