Despite the prolonged crisis in the Strait of Hormuz and the fact that it is constantly “locking in” new shipments, with refining needs covered at least through the end of June, Deputy CEO Petros Tzannetakis noted during the presentation of the quarterly results to analysts.
“We always plan about 4–5 weeks ahead as long as the situation of uncertainty persists,” he noted.
This also demonstrates the refinery’s technological capabilities to adapt immediately to changing circumstances, as prior to the war, Iraqi crude accounted for nearly two-thirds of the blend used by the group, with Mr. Tzannetakis not ruling out the possibility that, even if the situation normalizes, the pre-war status quo may not be restored.
“This situation forced us to try things we didn’t even know we’d need to try,” he noted, explaining that the company is now processing cargoes from the U.S., the North Sea, Egypt, and new types of Libyan crude(“El Sharara”).
Among the new types of crude processed by the Agioi Theodoroi refinery is alsoArab Light —the main type exported by Saudi Arabia—WTI shipments, as well as volumes transported via the pipeline connecting the fields of northern Iraq (Kirkuk) to the Turkish port of Ceyhan on the Mediterranean.
He made it clear that this new strategy may be adopted by the group even if normalcy returns to the Persian Gulf, especially if margins on products such as jet fuel and diesel remain high.
On the demand front, Motor Oil ’s deputy CEO appeared optimistic, particularly in light of the upcoming tourist season, stating that there are no signs of a decline in fuel consumption. He noted that the only change concerns high-octane premium fuels, as consumers are turning more to more conventional products due to higher prices.
In the bigger picture, however, overall demand remains resilient, supported in part by positive expectations for tourism.
“Speaking with people in the tourism industry, we see that, despite some delays in bookings, the outlook for this season is good, and we are already seeing many tourists in Athens,” he said, adding that both the second and third quarters are shaping up positively for demand for refined products.
On the refining front, he noted that the environment remains supportive, as margins are being bolstered by the ongoing tightness in the product market, and the overall positive impact of high margins continues to more than offset increased costs, maintaining Motor Oil’s outperformance.