NPRA 2007 Annual Meeting
Europe’s Growing Product Imbalance
Note: Middle distillates include jet and distillate; 2006 is January-October average.                                                                                   Source: IEA
SThis chart quantifies the gasoline and distillate imbalances in Europe.  Distillate products (diesel, heating oil, and jet fuel) are imported in increasing quantities, and excess gasoline is exported in increasing quantities, despite recent hydrocracking investments.

SIn 2004, the Former Soviet Union countries supplied about ¾ of Europe’s diesel and gas oil imports.

SThe U.S. East Coast has been the principal market for Europe’s gasoline exports, taking ¾ of Europe’s export volumes.  In 2006, the elimination of MTBE from RFG on the East Coast added a challenge for Europe’s gasoline exporters to the U.S., which was met as the U.S. has become a critical market for European refiners.

SLooking to the future, Europe’s distillate imports may be more difficult to locate as European sulfur specifications are lowered for a few years.  After 2010, new refinery projects in the Middle East and India will look to Europe as a market for their increased diesel export capability.  But Europe may still be competing with Asia for those product barrels.