Ship fuel shortage looms as refiners strained by war favour other products
Energy Aspects forecasts a 218,000-barrels-per-day deficit in the third quarter as refiners shift output toward diesel, gasoline and jet fuel.
- Consultancy Energy Aspects warned that fuel oil supplies face a 218,000 bpd deficit in the third quarter. This shortfall threatens to raise costs for power generators and shipowners struggling with war-related disruptions.
- Driven by higher margins, refiners are prioritizing diesel and gasoline over fuel oil by maximizing secondary unit runs. Energy Aspects analyst Royston Huan said, "Record-low gasoline and diesel inventories will incentivise refiners globally to maximise secondary unit runs with more fuel oil feedstock barrels."
- Prices for the main shipping fuel rose 76% to under $825 a metric ton in Singapore as of September 1, according to ZeroNorth data. This surge outstrips the 40% rise in benchmark Brent crude over the same period.
- Russian fuel oil exports hit a record low of 591,000 bpd in August, according to Kpler data. Middle East exports dropped 45% year-on-year as refineries like Al-Zour in Kuwait face significant operational outages.
- Asia faces the highest risk from supply tightness due to its reliance on Gulf imports, with Singapore importing more than half of its nearly 1 million barrels per day of demand. Sustained tightness will keep prices elevated through the third quarter.
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7 Articles
Fuel oil shortage threatens shipping as war disrupts refinery output
Refiners are prioritising diesel, gasoline and jet fuel as disruptions in Russia and the Middle East squeeze fuel oil supplies, with the global deficit forecast to reach 218,000 barrels per day in the third quarter.
Ship fuel shortage looms as refiners strained by war favour other products
A shortage of fuel oil used in ships and power plants looms in the third quarter as refiners increasingly squeezed by wars that have disrupted both crude processing and tanker traffic prioritise output of diesel and other products at its expense.
Ship fuel, a major cost component of global maritime transport, is facing a new bottleneck as the war disrupts refinery production and tanker flows. With the market deficit growing for the third quarter, pressure on freight and import prices is also intensifying.
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