Argentina Reinstates Export Taxes as Russian Crude Floods the Water, Refining Margins Explode

Argentina has reapplied export taxes on grains and by-products after briefly lifting them upon reaching a $7 billion sales cap, ARCA confirmed Wednesday. This move reflects not only U.S. pressure but also Buenos Aires’ ongoing liquidity crisis. With $1 billion already spent defending the peso, the government now appears to be shifting stress into budgetary accounts while still maintaining the dollar peg—setting the stage for more instability ahead.

China, for its part, has secured major soybean volumes from Argentina and is now back covering from Brazil, continuing to boycott U.S. beans despite Gulf crush margins offering better economics. Beijing is using soybeans as a bargaining chip, reiterating that any U.S. purchases hinge on tariff relief, leaving U.S. farmers sidelined from flows otherwise dominated by South America.

In Europe, product strength is diverging sharply from feedstock weakness. Russian refinery runs have fallen, reducing gasoil exports and tightening Atlantic Basin balances. At the same time, crude displaced from domestic processing is flooding into seaborne exports, pushing volumes on the water to record highs. This has inflated floating storage and sent refining margins for clean products soaring—on-screen Heat crack margins are now near $37/bbl. Asia will be incentivized to move barrels into Europe, but this will not prevent a diesel price spike in the next 4–6 weeks.

The surge in Russian crude on the water also raises a risk for U.S. exporters. Lower global crude prices—driven by these extra barrels—can blunt the economics of Permian and Bakken flows. While not fully visible in the numbers yet, warning signs are present: WTI–Brent spreads have stayed narrow, freight costs are high, and takeaway from the Permian to Corpus Christi is already running above 90% utilization. U.S. exports can still surge when the arb opens, but the system is stretched and increasingly vulnerable if Russian exports continue to swell.

Meanwhile, ICE gasoil rallied 2.5% to $728/mt with Oct/Apr backwardation widening to +$61.75/mt, underlining tightness in middle distillates. Feedstocks, however, softened further. NWE soft oil prices eased, with BOGO collapsing to +$407/mt, down 21% in three months.

The barge market remained active. RME traded at $1,462.50/mt, widening gross margins to nearly $210/mt, while the UCOME/RME spread narrowed to +$32.5/mt. UCOME continued to attract heavy interest, with paper volumes surpassing 350 kt and barges clearing at $1,495/mt—equating to gross margins near $220/mt. Clearly, market appetite remains to stay long UCOME versus RME.

In the U.S., D4 RINs weakened as Washington moved closer to a government shutdown. Dec ’25 settled at 0.986, down 21 cents, while Dec ’26 fell to 1.042. Market unease is growing as a bumper crop collides with low water levels on the Mississippi, amplifying logistical stress. Trump administration officials are already hinting at direct farmer aid, but the policy response seems to underestimate the challenges a swollen harvest and paralyzed river system could unleash.

In Asia, Sustainable Aviation Fuel (SAF) is gaining traction after South Korea announced its mandate last week. HD Hyundai Oilbank has now begun supplying SAF to Korean Air, covering 90 aircraft through 2026. Contracts are being secured quickly, showing how policy support in Asia is translating into real offtake for biofuels.

Finally, Brazil is seeing a wave of new soybean crushing investment, much of it driven by Chinese demand pull. Crushers plan to invest more than $1.11 billion over the next year to expand capacity. By 2025, the number of plants will rise from 132 to 144, lifting refining capacity by around 8% to over 80 million tonnes per year. Global majors like Bunge, ADM, and Cargill are all participating, and with 75% of Brazilian biodiesel still sourced from soybeans, this expansion underscores how China’s buying patterns and Brazil’s bumper crops are reshaping global oilseed trade.