FUEL OIL BECOMES ASIA NEXT COST SHOCK

What happened: Disrupted Middle East and Russian fuel oil supplies, resilient bunker demand and high freight rates pushed Singapore high-sulphur fuel oil above the price of the crude used to produce it. Key numbers: Singapore November HSFO crack above $10/bbl in mid-October versus a discount of Why it matters: The shortage is concentrated in Asia, and expensive freight undermines the arbitrage that would normally draw Western supply. Seasonal Gulf relief and additional Chinese export quotas could ease the squeeze toward year-end, but a return to pre-war pricing looks harder to achieve.

Disrupted Middle East and Russian fuel oil supplies, resilient bunker demand and high freight rates pushed Singapore high-sulphur fuel oil above the price of the crude used to produce it.

The shortage is concentrated in Asia, and expensive freight undermines the arbitrage that would normally draw Western supply. Seasonal Gulf relief and additional Chinese export quotas could ease the squeeze toward year-end, but a return to pre-war pricing looks harder to achieve.