With cracks absolutely rocketing and jet in particular getting an unprecedented uplift, refiners would be wanting to maximize jet yields where they can, by pulling away kero from the gasoil blend pool and going even closer to the freeze and flash point constraints.
However only US and European refineries can pull these lever. For the Asian refineries, with runcuts in place, they would be running to low intake feasibility levels. No optimization is in play except 'go as low as you can' before hitting min hydraulic constraints.
Beggars can't be choosers, so Asian refineries will likely grab whatever crude they can get their hands on ex-AG barrels. Regional crudes like Labuan, Sleb and Minas would fetch record premiums given locality and exposure only for the Afra market. India would be rushing to secure Russian oil again. China can tap on their SPR and only run crude up to product domestic demand.
WTI, WAF, Guyana, Brazilian crude will all sell like hot cakes. The competition will be to pull these barrels away from Europe will be fierce because the Asian refineries will now value the crude on baseload economics vs marginal economics pre-crisis. It will be a new ball-game and physical traders should be poised for this change in dynamic.
There are of course crudes with higher kero yields than others, namely Agbami and the Malaysian grades, but our view is that GPW's matter less in the current climate - it is more about even getting those barrels.
