Global HSFO Shortage Worsens Amid Rising Prices
Increased oil exports through the Strait of Hormuz do not lead to an increase in the production of high-sulfur fuel oil (HSFO), which exacerbates the shortage in this market and contributes to rising marine fuel prices.
Consensus
- The export of crude oil through the Strait of Hormuz has not led to increased production of high-sulfur fuel oil (HSFO).
- The Middle East conflict has reduced HSFO shipments from the Persian Gulf, including from Iran, by 800,000 tons per month.
- Ukrainian attacks on Russian refineries have reduced HSFO supply by 1 million tons per month.
- High refining margins have led refineries to prioritize diesel production over HSFO.
- HSFO prices in Singapore have reached a maximum level since April.
- The cost of HSFO relative to crude oil in Asia has reached a seven-month high.
- The situation for low-sulfur fuel oil is less strained, with stable supply from China and Nigeria's Dangote refinery.
Points of divergence
- Ukrainian attacks on Russian refineries reduced HSFO supply by 1 million tonnes per month. — vedomosti
- The cost of HSFO relative to oil in Asia rose sharply on October 15, reaching a seven-month high. — interfax
- North Asian refineries plan to use over 1 million tons of HSFO as feedstock in November due to disruptions in Saudi crude supply via the Red Sea. — vedomosti
- The recovery of medium and heavy crude oil shipments could reduce refineries' demand for HSFO and increase its availability for marine fuel. — interfax
Coverage (2 sources)
- In Vitol Group stated about maintaining shortage of marine fuel on world market — Ведомости
- Top Vitol manager noted preservation of shortage of marine fuel — Интерфакс