Prices of Asia oil products mostly jumped in the wake of the US-Israel attack on Iran, with fuel oil and naphtha showing the largest gains, following Iranian attacks on merchant shipping in the Gulf of Hormuz.
Fuel oil’s prompt intermonth Apr/May timespreads for the high-sulphur 380-cst grade was valued $9.50/mt in backwardation at midday in Singapore, rising from its previous Asia close of $2.80/mt last Friday.
Prompt timespreads for the low-sulphur grade also more modestly, valued at around $9.50/mt, rising from around $3.80/mt at the previous close.
The Middle East is a major exporter of fuel oil, particularly the high-sulphur grade, averaging at around 2 million mt/month in the 12 months ending in February, or accounting for around 35% of the total imports into the Singapore trading hub, where the world’s largest marine fuels port is located. Major exporting countries include Iran, Kuwait, Iraq and Saudi Arabia, all of whom export via the Straits of Hormuz.
Wood Macknezie's analysis indicates that fuel oil could be the product most affected if the Hormuz Straits remain impassable for a lengthy duration of time. This will also lift prices in the downstream bunkers market, making shipping more expensive, particularly in the United Arab Emirates port of Fujairah, a major bunkering hub, with sales of about 600,000-800,000 mt/month.
Reflecting this, the price for the 380-cst grade’s Apr contract is valued at $482/mt, up from the previous close of around $415/mt, while the 0.5%-sulphur grade is valued at $540/mt, up from just under $500/mt.
Actual bunker prices are likely $5-10/mt higher, depending on where premiums for physical cargoes close at end-of-day trading. Prevailing cargo differentials for the 380-cst and the 0.5-sulhpur grades valued at around $5.00-5.50/mt and $2.00/mt respectively, while premiums for ex-wharf bunkers for the grades were at $2.50-3.00/mt and $4.00-4.50/mt in the previous week.
Naphtha spreads also strengthened significantly, with the region being a major exporter of the product to Asia, with about 3.5-4.5 million mt flowing eastwards monthly.
Reflecting this, the prompt intermonth spread for the CFR Japan contract was valued at around $23.50/mt, surging from the previous close of just over $7/mt, while its crack spreads are minus $1.20/mt, rising from minus $2.50-3.00/mt previously.
Diesel’s spreads also strengthened, as the region is also a major exporter of the product to Europe, accounting for an average of about 1.7 million mt/month in 2025, or 35% of the continent’s total imports.
Its Apr/May spreads for the Singapore 10-ppm grade are valued at around $4.00/bbl, up from the previous close of around $1/bbl, while the grade’s cracks to Dubai are valued steady at around $29/bbl, signalling that the product’s fixed-price levels are rising in line with crude benchmarks.
The one product that has not shown much strength is the gasoline market, with both its intermonth spreads and cracks for Singapore 92-RON contract rose modestly in comparison versus the previous close, valued respectively at around $1.31/bbl and $11.00/bbl. This is because the region is neither a major exporter nor importer of the product.
Depending on the duration of the war and the severity of attacks in the Straits of Hormuz, Wood Mackenzie sees significant upside to prices, and could, in a worst-case scenario, lead to export bans by major exporters of products in the region, notably India, China and South Korea. This scenario would be in the wake of these countries being unable to receive crude imports from the Middle East Gulf region.
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