The global fuel oil market is expected to remain tight for the medium term due to the effects of the Russo-Ukrainian war, reports Manifold Times quoting the observations of Yaw Yan Chong, the Director of Oil Research, at financial markets and infrastructure data provider Refinitiv.
Oil on the Boil
Refinitiv published the Oil Special Report: Oil on the Boil – Crude, gasoil most impacted by Russian invasion of Ukraine on Friday (18 March) which discussed the war’s effects on the crude, diesel, low sulphur fuel oil (LSFO) and gasoline markets.
“Since Russia invaded Ukraine in late February, oil price benchmarks surged to multi-year highs and hit unprecedented levels in some cases in the immediate aftermath, with the crude and diesel markets being the most impacted,” notes Yaw.
“They have since come off these stratospheric levels but remain high, and crucially above pre-invasion levels.”
LSFO – Cracks hit daily record-high
Low-sulfur fuel oil cracks to Dubai hit a daily record high of $31.79/bbl post-invasion and have averaged at a monthly record-high of $26.88/bbl, while high-sulfur fuel oil cracks, normally at discounts to crude, surged to the black at a 30-month high of $1.51/bbl on Mar 11.
Russia is the world’s largest exporter of fuel oil, with most of its 2.5-3.0 million mt/month of outflows headed to Europe, mainly as refinery feedstock and marine fuels blendstocks.
Asia typically receives about 300,000-400,000 mt/month, mostly for bunker-blending, while small volumes of about 40,000/mt from its Far East refineries are taken as feedstocks by refiners in the US, China and South Korea.
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Source: Manifold Times
