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.
16 Articles
16 Articles
The ship's fuel markets are headed towards a shortage crisis during the third quarter of the year, with the movement of oil tankers disrupted and a number of refineries affected by the war in the Middle East and Eastern Europe, prompting the refineries to prioritize the production of diesel, gasoline and aviation fuel at the expense of fuel oil.
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.
The escalation of the US-Iran war and the decline in Chinese exports are leaving the heating oil market with the most severe deficit in a year; Asia is suffering the most.
Fuel oil shortage shows the refining system has run out of trade-offs
Fuel oil was supposed to be the one product with no scarcity problem. It is the residue at the bottom of the barrel, what remains after everything more valuable has been distilled off, and for decades the refining industry's principal challenge with it was finding buyers. It powers ships and some power stations because those were the only customers willing to burn something so heavy and so cheap. A global fuel oil deficit of 218,000 barrels per…
A shortage of fuel oil used in ships and power plants is on the horizon during the third quarter. Refineries, which are under increasing pressure because of wars that have disrupted the processing of crude oil and the movement of oil tankers, give priority to the production of diesel and other products at the expense of fuel oil.
Coverage Details
Bias Distribution
- 57% of the sources are Center
Factuality
To view factuality data please Upgrade to Premium
