Two analysts at the bank explained in a note reported by Bloomberg that the prices of many refined products are significantly higher than those of crude oil. They pointed out that the severe disruptions in the supply of so-called medium-heavy crude oil threaten to reduce the production of diesel, jet fuel, and fuel oil.
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We pointed out that medium and heavy crude oil (usually used in the production of jet fuel, diesel and fuel oil) accounts for about 60% of the usual crude exports from the Arabian Gulf, while alternatives available outside the Middle East are very limited.
Although oil prices have risen by more than 40% since the start of the war, some products have seen even greater increases, with fuel costs nearly doubling in parts of Asia, and South Korea joining China and Thailand in imposing export restrictions to protect domestic markets.
