Alex Turnbull

And ultimately the decision of the refineries is if they don't have inputs, they have to shut the refinery down, which incurs a large amount of fixed costs and downtime and so forth.

So a lot of the players are kind of living hand to mouth and trying

to get whatever they can to stay open as long as they can.

So that's how you have this extreme willingness to pay for prompt cargoes in order to keep these assets operating and running.

But then the futures curve is out 30, 60 days.

And that's a long time in the current federal context where you could get resolution or not.

And so that disconnect is going to remain, I think, so long as there is no sense of a clear path here.

yeah i mean certainly less high-income countries in asia you're starting to see quite an acute crunch in the philippines so they've recently secured some cargoes from china on a one-off basis some vietnam the same you know places like the pacific islands like they're in a not very good place so it's already starting to begin the demand destruction starting mostly caused mostly by income

Well, for some Chinese teapot refineries, just smaller private ones, they live in a different political slash economic context.

And if they are told to stay on, they will.

It depends on which.

In many of these countries, you don't have purely market price fuels.

So whether that's Vietnam or China, places where you have market pricing pass through, like Australia, the price of fuel is getting very expensive indeed.

American players are moving to Asia quite sharply right now.

So Asian prices in spot, even the JKM futures above European TTF or title transfer facility futures for the next period, that could change quickly.

But at the moment, Asia has a much higher urgency and willingness to pay as they go into summer, higher power demand from cooling, air conditioning, and also just a much more acute dependence upon markets

lng in certain countries uh so in europe you've also so you're going into summer you have this solar and wind and it's not quite panic stations just yet so i think europe will be a little bit more slow to fill its storage but then by if this goes on until say june or july then that's when the real uh panic will set in

I mean, most of the Russian crude has already been sold anyway, and it has been sold very heavily into Chinese refineries and teapots.

So it's not like it

Some of it was sitting offshore when it was going through a period of more robust US sanctions.