Northwest European Gasoline Margins Fall Over $5 on Sharp Crude Oil Decline

Gasoline refining margins in Northwest Europe fell sharply on Monday, dropping by more than $5 to settle at $33.06 per barrel. The significant decline in profitability for refiners was driven by a steep sell-off in crude oil futures.

Crude Prices Lead the Way Down

The primary catalyst for the margin collapse was a plunge in oil prices, which fell approximately 5% to a three-week low. According to market reports, the drop in crude was fueled by expectations of de-escalating tensions in the Middle East after the U.S. president delayed further action against Iran, signaling a potential for diplomatic agreements that could increase oil supply.

In the physical market, trading activity was muted. No Eurobob E5 or E10 barges were reported to have changed hands on the Argus pricing platform during Monday's session.

Regional Supply Disruptions

Despite the drop in margins, several supply-side issues were reported in the broader region. Two industry sources confirmed that Russia’s Lukoil Volgograd refinery has halted all crude processing since Friday following a fire caused by a drone attack.

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Separately, the Iraqi state news agency reported on Monday that civil defense teams had extinguished a fire at a refinery within the Baiji oil complex. These incidents, which would typically be bullish for product prices, were overshadowed by the significant drop in the underlying crude oil benchmark.

Export and Market Context

Data from Kpler showed that gasoline and blending component exports from the EU-27 and the UK to other regions averaged 1.06 million barrels per day in July. This compares to an average of 1.03 million barrels per day in June.

In the U.S., President Trump on Monday called on oil companies to lower gasoline prices for consumers, specifically mentioning Chevron and its CEO Mike Wirth.