Wars in West Asia and Europe and a refinery shift to higher‑margin products have
intensified a fuel oil supply shortage. Kpler data show Middle East fuel oil
exports fell 45% YoY from March–August to an average 447k b/d. Energy Aspects
forecasts a 218k b/d Q3 fuel oil supply deficit — its first projected shortage
since Q3 2025, when the gap was 6k b/d. Gasoline, diesel and jet fuel are all
tightening, but rising diesel crack spreads are prompting refiners to maximize
diesel and gasoline yields and to upgrade heavy residues via secondary
processing rather than supplying them as fuel oil, further reducing bunker
availability and pushing bunker fuel prices higher, market participant Sunil
Reddy said.
