Asian Fuel Oil Costs Surge on Supply Disruptions and Cracks

Asian shipping fuel markets face mounting cost pressures as disrupted Middle Eastern and Russian supplies combine with resilient bunker demand, pushing high-sulphur fuel oil prices above underlying crude. Regional price spreads highlight severe regional shortages that threaten global maritime transport economics as replacement cargoes remain expensive.

### Money Play Energy and climate policy shifts alongside supply shocks impact energy markets, though no specific equity vehicles are designated in the primary verified data for this commodity flow.

## Catalyst Analysis: Regional Squeeze in High-Sulphur Fuel Oil Disrupted supplies from the Middle East and Russia, resilient bunker demand, and prohibitive freight rates have driven high-sulphur fuel oil (HSFO) above the price of the crude used to produce it. In Singapore, the November crack against Dubai crude soared above $10 per barrel in mid-October, marking a stark reversal from a discount of around $5 per barrel in February prior to the conflict. The Singapore–Rotterdam HSFO swap spread reached a record $95 per tonne on October 7 before easing to $88 per tonne, underscoring a severe shortage concentrated specifically in the Asian market.

Supply losses from key exporting regions underpin the price premium. Middle Eastern shipments to Singapore dropped sharply following Persian Gulf shipping disruptions, while Russian shipments fell to 25,000 barrels per day by September due to refinery disruptions from Ukrainian drone attacks. Simultaneously, Asian consumption has remained robust; Singapore sold 4.7 million tonnes of bunker fuel in September, only 1% below a year earlier, with year-to-date HSFO sales rising about 10% to roughly 17.5 million tonnes amid an expanding scrubber-equipped fleet.