Middle East supply disruptions impact the Asian fuel oil market, with HSFO and VLSFO crack spreads strengthening across the board

⑴ The Asian high-sulfur fuel oil market remained strong on Tuesday, with crack spreads trading in premium territory. Data shows that Singapore's April 380-cst high-sulfur fuel oil/Brent crude oil crack spread rose to about 50 cents premium, while the April high-sulfur fuel oil/Dubai crude oil crack spread closed above $3.25 per barrel premium. Spot premiums also continued to rise due to active buying and a strengthening forward curve. ⑵ Traders expect that Asian fuel oil supply will tighten due to loading disruptions in the Gulf region. Meanwhile, the ultra-low sulfur fuel oil market also continued its upward trend, with the April crack spread soaring above $12 per barrel premium. ⑶ In terms of refinery dynamics, Rongsheng Petrochemical, partly owned by Saudi Aramco, said on Tuesday that one of its 200,000 barrels/day atmospheric distillation units entered maintenance ahead of schedule due to tightened crude supply caused by Middle East conflicts. ⑷ Other market news shows that Brent crude oil has risen for the third consecutive day as US-Iran tensions escalate and shipping in the Strait of Hormuz is threatened. To cope with the escalation of regional conflicts, Indonesia's energy minister said the country will increase crude oil imports from the US to replace part of the Middle East supply. Meanwhile, supertanker freight rates in the Middle East have soared to historic highs.