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Asian HSFO rally cools with lower demand, rare exports

  • : Oil products
  • 21/10/27

Asian high-sulphur fuel oil (HSFO) markets have weakened considerably after a summer power generation-fuelled rally for the past few months, against cooling demand and higher exports.

Singapore 180cst HSFO margins, or front-month Singapore 180cst swaps against Dubai crude values, fell from over 10-month highs on 7 October to five-month lows of -$8.48/bl yesterday, Argus' assessments showed. Margins were last lower at -$8.89/bl on 25 May.

The backwardation in 180cst and 380cst HSFO markets have also come off sharply from over 1½-year highs in early September. The 180cst HSFO timespread was at an over four-month low of -$0.25/t on 22 October, before rising to $0.25/t today. The 380cst HSFO timespread fell to -$0.50/t today, with it last at such a level on 15 June.

Markets softened against summer power generation demand from Pakistan, Bangladesh and the Mideast Gulf coming off recently with cooling temperatures, said market participants. Pakistan's state-owned PSO bought just 65,000t of the 180,000t of HSFO and low-sulphur fuel oil it sought for first-half November delivery. Bangladesh's HSFO import volumes next month are forecasted to be a three-month low of 135,400t, down from three-year highs of 329,200t in October, according to Vortexa data.

With slowing summer demand, HSFO exports from the Mideast Gulf are seen to be higher in October, possibly around 1.6mn t (332,900 b/d) or north of that, said traders and analysts. Vortexa data also shows that total exports this month could rise to 1.95mn t (406,200 b/d), a year high. Monthly exports from July-September averaged 1.69mn t.

Rare exports add to regional barrels

Rare 380cst HSFO shipments from Kuwait and South Korea have also added to regional supplies.

Kuwait's KPC recently exported 100,000-120,000t of 380cst heavy fuel oil (HFO) for end-October loading, due to the fire at its 346,000 b/d Mina al-Ahmadi refinery's atmospheric residual desulphurisation (ARDS) unit. It was likely clearing inventory to make room for excess fuel that could surface with the unit down. This was its first export since May, and a reversal from its purchases for July-October delivery. It is not yet confirmed if KPC will offer more HFO, according to a source familiar with refinery operations.

South Korea's GS Caltex, a typical 380cst HSFO importer, previously sold rare volumes in a 40,000t cargo each for September and October loading, as it maximised HSFO output against weak bitumen markets. Refiners typically alternate production between HSFO and bitumen, with the margin between the two products one of the factors considered when deciding on output. GS Caltex has offered three times the volumes at 120,000t of HSFO for November loading, 80,000t of which has been sold. The cargoes have likely headed to China and most recently Singapore. The Argus ABX 2 bitumen index traded at over two-year lows of -$80.25/t to Singapore 380cst HSFO prices on 8 October, though it has narrowed to -$44/t on 22 October.

HSFO arbitrage arrivals from the west of Suez to Singapore in October were also higher than average at 2.3mn-2.8mn t (478,500-582,600 b/d), said market participants, likely owing to healthy east-west spreads.

Higher Asian refinery utilisation rates with stronger regional transportation fuels demand could further pressure margins as well. Market participants also anticipate possible slowing straight-run fuel oil demand from Chinese independent refineries next month, as a fourth batch of crude import quotas has been released. These factors could further contribute to HSFO weakness, at least before any potential support from winter heating demand.

Delivered HSFO bunker premiums fall back to historical averages

Cooling demand and higher exports have caused HSFO bunker premiums in Singapore, or the price difference between cargo and delivered fuel, to retreat to long-term average values. Argus yesterday assessed the premium at $9/t, after it averaged over $15/t over the past three months. The premium spiked over $30/t twice in September, as the market grappled with fewer wholesale availabilities and quality issues with some cargoes](https://direct.argusmedia.com/newsandanalysis/article/2260467).

"Most suppliers have cargoes now," commented a local seller, reversing a previous trend over the past few weeks where only a few participants could supply HSFO.

Current HSFO bunker demand was described by one trader as "a bit soft" while another one commented that "there is still some tightness, which the current premium is not reflecting".

The weakening HSFO bunker market is also causing the premium of very-low sulphur fuel (VLSFO) over HSFO to rise sharply. It has averaged over $97/t so far in October, up from $80/t in September, according to Argus data. A higher premium of VLSFO over HSFO (or a larger discount of HSFO versus VLSFO) encourages ship owners to install scrubbers and save on fuel costs.

Asian 180cst HSFO margins against Dubai crude

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25/05/09

White House ends use of carbon cost

White House ends use of carbon cost

Washington, 9 May (Argus) — The US is ending its use of a metric for estimating the economic damages from greenhouse gas (GHG) emissions, the latest reversal of climate change policies supported by President Donald Trump's predecessors. The White House Office of Management and Budget (OMB) this week directed federal agencies to stop using the social cost of carbon as part of any regulatory or decision-making practices, except in cases where it is required by law, citing the need "remove any barriers put in place by previous administrations" that restrict the ability of the US to get the most benefit "from our abundant natural resources". "Under this guidance, the circumstances where agencies will need to engage in monetized greenhouse gas emission analysis will be few to none," OMB said in a 5 May memo to federal agencies. In cases where such an analysis is required by law, agencies should limit their work "to the minimum consideration required" and address only the domestic effects, unless required by law. OMB said these steps are needed to ensure sound regulatory decisions and avoid misleading the public because the uncertainties of such analyses "are too great". The budget office issued the guidance in response to an executive order Trump issued on his first day in office, which also disbanded an interagency working group on the social cost of carbon and called for faster permitting for domestic oil and gas production and the termination of various orders issued by former president Joe Biden related to combating climate change. The metric, first established by the administration of former US president Barack Obama, has been subject to a tug of war between Democrats and Republicans. Trump, in his first term, slashed the value of the social cost of carbon, a move Biden later reversed . Biden then directed agencies to fold the metric into their procurement processes and environmental reviews. The US began relying on the cost estimate in 2010, offering a way to estimate the full costs and benefits of climate-related regulations. The Biden administration estimated the global cost of emitting CO2 at $120-$340/metric tonne and included it in rules related to cars, trucks, residential appliances, ozone standards, methane emission rules, refineries and federal oil and gas leases. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil's inflation accelerates to 5.53pc in April


25/05/09
25/05/09

Brazil's inflation accelerates to 5.53pc in April

Sao Paulo, 9 May (Argus) — Brazil's annualized inflation rate rose to 5.53pc in April, accelerating for a third month despite six central bank rate hikes since September aimed at cooling the economy. The country's annualized inflation accelerated from 5.48pc in March and 5.06pc in February, according to government statistics agency IBGE. Food and beverages rose by an annual 7.81pc, up from 7.68pc in March. Ground coffee increased at an annual 80.2pc, accelerating from 77.78pc in the month prior. Still, soybean oil prices decelerated to 22.83pc in April from 24.36pc in March. Domestic power consumption costs rose to 0.71pc from 0.33pc a month earlier. Transportation costs decelerated to 5.49pc from 6.05pc in March. Gasoline prices slowed to a 8.86pc gain from 10.89pc a month earlier. The increase in ethanol and diesel prices decelerated as well to 13.9pc and 6.42pc in April from 20.08pc and 8.13pc in March, respectively. The hike in compressed natural gas prices (CNG) fell to 3.5pc from 3.92pc a month prior. Inflation posted the seventh consecutive monthly increase above the central bank's goal of 3pc, with tolerance of 1.5 percentage point above or below. Brazil's central bank increased its target interest rate for the sixth time in a row to 14.75pc on 7 May. The bank has been trying to counter soaring inflation as it has recently changed the way it tracks its goal. Monthly cooldown But Brazil's monthly inflation decelerated to 0.43pc in April from a 0.56pc gain in March. Food and beverages decelerated on a monthly basis to 0.82pc in April from a 1.17pc increase a month earlier, according to IBGE. Housing costs also decelerated to 0.24pc from 0.14pc in March. Transportation costs contracted by 0.38pc and posted the largest monthly contraction in April. Diesel prices posted the largest contraction at 1.27pc in April. Petrobras made three diesel price readjustments in April-May. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Indonesia threatens to stop oil imports from Singapore


25/05/09
25/05/09

Indonesia threatens to stop oil imports from Singapore

Singapore, 9 May (Argus) — Indonesian market participants have reacted with caution to a call by the country's energy minister to stop all oil imports from Singapore. Energy and mineral resources minister Bahlil Lahadalia said on 8 May that Indonesia should stop purchases from Singapore and instead buy directly from oil producers in the Middle East, according to media reports that were confirmed by several Indonesian market participants. Discussions are taking place but there is so far no official statement from the ministry nor any direction from managers in the oil industry, one market participant said. "None of us are taking it seriously" and it is still "business as usual", the official said. The regional trading hub of Singapore is a major supplier of oil products to Indonesia, and any end to shipments from the country would upend trade flows. Singapore is the biggest gasoline supplier to Indonesia, accounting for more than 60pc of total shipments, according to customs data. Singapore exported 236,000 b/d of gasoline to Indonesia in 2024, with Malaysia a distant second at 79,500 b/d. Singapore is also one of Indonesia's top gasoil and jet fuel suppliers, shipping over 54,000 b/d of gasoil and 8,300 b/d of jet fuel to the country in January-April this year, according to data from government agency Enterprise Singapore. The government has already begun to build docks that can accommodate larger, long-haul vessels, Bahlil said, according to state-owned media. Any move by Indonesian importers to switch purchases to the Mideast Gulf would increase the replacement cost of supply because of higher freight rates, said market participants. Indonesian buyers are currently negotiating term contracts on a fob Singapore basis, so a sudden cut in supplies would not be feasible. The term contract is due for renewal soon, traders said. State-owned oil firm Pertamina, the dominant products importer, is expected to begin term negotiations for its second-half 2025 requirements in May-June. A decision by Indonesia to end imports from Singapore would cut regional gasoline demand but could be bullish for the market overall, given the extra logistics required to blend elsewhere and ship into southeast Asia. The Mideast Gulf currently supplies mainly Pakistan and Africa, with just 15pc of gasoline exports from the region heading towards Indonesia and Singapore in 2024, according to data from ship tracking firm Kpler. Indonesia's energy ministry (ESDM) did not immediately reply to a request for confirmation of Bahlil's comments. They came a day after the country's president Prabowo Subianto called for Indonesia to become self-sufficient in oil in the next five years. Indonesia has also proposed raising energy imports from the US as part of talks to reduce import tariffs threatened by president Donald Trump. Indonesia is considering boosting imports of crude, LPG, LNG and refined fuels in order to rebalance its trade surplus and ease bilateral tensions, government officials have said. By Aldric Chew and Lu Yawen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

HSFO defies the green tide


25/05/08
25/05/08

HSFO defies the green tide

New York, 8 May (Argus) — High-sulphur fuel oil (HSFO), once seen as a fading relic, is proving remarkably resilient (see table) despite the maritime sector's push toward decarbonization. The fuel remains economically attractive thanks to persistent scrubber investments and regulatory frameworks that fail to fully penalize its use. Under the EU notation, HSFO and very low-sulphur fuel oil (VLSFO) are assigned the same calorific and greenhouse gas emission values. This equivalence means that ships fitted with scrubbers — systems that strip out sulphur oxides — face no additional penalties for choosing HSFO over VLSFO. As a result, greenhouse gas fees under FuelEU Maritime and the EU emissions trading system (ETS) offer no disincentive for scrubber users to stick with cheaper HSFO. In March 2025, the VLSFO-HSFO spread in Singapore narrowed to just $44/t, the lowest since the IMO 2020 sulphur cap took effect. At that level, a scrubber on a capesize bulker pays for itself in under two years. When the spread averaged $122/t in 2024, the payback period was about eight months. Even in regulated markets like Europe, economics favor HSFO. Under the EU ETS, ships operating in, out of or between EU ports must pay for 70pc of their CO2 emissions in 2025. In Rotterdam, bunker prices including ETS surcharges still favor HSFO: $575/t for HSFO, $605/t for VLSFO, and $783/t for a B30 Used cooking oil methyl ester blend. While biofuels, methanol and LNG are inching forward in market share, they remain cost-prohibitive. In the meantime, HSFO, with scrubber backing, continues to punch above its environmental weight. By Stefka Wechsler Selected ports marine fuel demand t % Chg 1Q 25-1Q 24 1Q 2025 less 1Q 2024 1Q 2025 1Q 2024 Singapore HSFO 1.0% 33,160.0 4,898,372.0 4,865,212.0 VLSFO/ULSFO -13.0% -1,005,951.0 6,829,667.0 7,835,618.0 MGO/MDO -5.0% -49,012.0 907,874.0 956,886.0 biofuel blends 187.0% 237,552.0 364,418.0 126,866.0 LNG 34.0% 25,935.0 101,856.0 75,921.0 Rotterdam HSFO 1.0% 11,169.0 829,197.0 818,028.0 VLSFO/ULSFO 14.0% 118,670.0 976,249.0 857,579.0 MGO/MDO 3.0% 9,662.0 393,071.0 383,409.0 biofuel blends -60.0% -158,597.0 104,037.0 262,634.0 LNG 7.0% 7.0 104.0 97.0 Panama HSFO 22.0% 65,266.0 362,388.0 297,122.0 VLSFO/ULSFO 25.0% 177,296.0 878,776.0 701,480.0 MGO/MDO 22.0% 27,097.0 150,980.0 123,883.0 — Maritime and Port Authority of Singapore, Rotterdam Port Authority and Panama Canal Authority Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sonatrach Augusta refinery restart extends into May


25/05/08
25/05/08

Sonatrach Augusta refinery restart extends into May

Barcelona, 8 May (Argus) — Crude deliveries to Algerian state-owned Sonatrach's 198,000 b/d Augusta refinery in Italy were higher in April, but it appears a full restart from planned works will take longer than initially expected. Crude deliveries last month were around 70,000 b/d, up from 20,000 b/d in March. Receipts averaged 95,000 b/d in January-April, down from 160,000 b/d overall in 2024. The refinery has been under a planned five-year maintenance shutdown since the end of January, the first turnaround since shortly after Sonatrach bought the plant from ExxonMobil in 2019. Sonatrach initially said the facility would be back online by 30 April, with units restarting in two phases. But the company in an updated note to local authorities said an atmospheric distillation unit, propane deasphalter, hydro-desulphuriser, propane splitter and other secondary units would potentially flare on restart up to 31 May. One of these segments is the butamer unit, which caught fire in April . It is unclear if the fire added to the length of the overall stoppage. Sonatrach has not replied to queries on the matter. It was anticipated the turnaround would be a little quicker than in 2019 (see chart), but the two periods of maintenance now appear to be roughly similar. Crude delivery last month included over 45,000 b/d of Saudi Arab Light, 15,000 b/d of Kazakh Kebco and over 5,000 b/d of Algerian Saharan Blend. Argus assessed these at a weighted average gravity of 33.7°API and 1.5pc sulphur content, compared with 36.5°API and 0.9pc sulphur in February, before receipts all but stopped for the works. Receipts averaged 34.7°API and 1.2pc sulphur in January-April, compared with 35.2°API and 0.9pc sulphur overall in 2024. The pace of delivery in May is slow. Around 750,000 bl of Arab Light has discharged but no tankers are signalling arrival. By Adam Porter Augusta crude receipts mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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