According to analysts cited by Al Jazeera, wars in the Middle East and Europe, along with refineries shifting to produce more profitable fuels, have exacerbated the fuel oil supply shortage.
Data from energy trade analysis firm Kpler shows that Middle Eastern fuel oil exports fell 45% year-on-year between March and August, averaging 447,000 barrels per day. Energy consultancy Energy Aspects predicts a fuel oil supply deficit of 218,000 barrels per day in the third quarter. This is the first time the firm has predicted a fuel oil supply shortage since the third quarter of 2025, when the deficit was projected to be only 6,000 barrels per day.
Gasoline, diesel, and jet fuel are all affected by the tight supply, but because diesel margins are much higher than fuel oil, refineries are more inclined to increase production of high-margin products like diesel, further squeezing fuel oil supply. Market analyst Sunil Reddy stated that the continued rise in diesel crack spreads is prompting refineries to extract as much diesel and gasoline as possible from each barrel of crude oil and to convert heavy oil residue into higher-value products through secondary processing, rather than using it as marine fuel oil. He pointed out that this means that high diesel profit margins are drawing away crude oil components that were originally supplied to the marine fuel market, further pushing up marine fuel prices.
