Sweet and sour prospects for global refiners

With shale crude production escalating and the world's refineries becoming increasingly complex, processing sour crudes is no longer a reliable route to sweet margins

For decades, the accepted wisdom for refiners was that it pays to become increasingly complex, by building the facilities needed to process sour (high-sulphur) and heavy grades of crude - less costly than the sweet and light grades which simple refineries need. But that wisdom is now under challenge. Surging production of shale crudes - mostly light and low-sulphur - in North America is cutting US imports of sweet crudes and whittling away at prices for sweet crudes worldwide. At the same time, the start-up of new, complex refining capacity in Asia is bidding-up the prices of sour crudes. Refining operations are driven by the marginal