Key facts
- Middle East fuel oil exports are down by at least 800,000 tons per month.
- Asian refiners have secured 1 million tons of fuel oil for November delivery.
- Russian refinery supply losses are estimated at 1 million tons per month.
- The spot market premium for shipping fuel oil has reached nearly $50 per ton.
Global fuel oil supply is tightening amid geopolitical tensions and refinery disruptions, with significant reductions in exports from the Middle East and Russia. Kieran Gallagher, head of Asian operations at Vitol, stated that Middle East fuel oil exports are running at least 800,000 tons a month lower than pre-war levels. He noted that producers are facing higher freight rates and risk premiums to ship cargoes from the Strait of Hormuz. Additionally, Ukrainian drone attacks on Russian refineries have further reduced supply by an estimated 1 million tons per month. Some Asian refiners are switching to high-sulfur fuel oil as feedstock, snapping up about 1 million tons for November delivery. The premium for fuel oil on the spot market has surged to nearly $50 per ton, a substantial increase from $5.10 per ton in late February, according to LSEG data reported by Reuters.