The fuel market in Singapore, as one of Asia's most important trading hubs, is facing a new challenge regarding fuel prices. Supply disruptions from the Middle East and Russia, steady demand for fuel, and high transportation rates have pushed the price of high-sulfur heavy fuel above the price of the crude oil from which it is derived.
Impact of Supply Disruptions on Prices
In mid-October, the price spread of high-sulfur heavy fuel oil (HSFO) in Singapore compared to Dubai crude reached over $10 per barrel, which, compared to a discount of about $5 per barrel in February, indicates a change of more than $15 per barrel. This reflects the rising costs of marine fuel, which are more influenced by high supply costs than by the increase in oil prices.
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Notably, the Singapore-Rotterdam heavy fuel rate spread reached an unprecedented range of $95 per ton on October 7, equivalent to nearly $15 per barrel. However, given the negative rates in European markets and declining rates along the Gulf Coast of the United States, the extent of the shortage in the Asian market is clearly visible.
Reduced Supply and Steady Demand
In 2025, the average exports of heavy fuel and very low sulfur fuel oil (VLSFO) from the Middle East to Singapore were about 100,000 barrels per day. This amount completely disappeared in April and May due to disruptions in the Hormuz transport, and in July it reached 130,000 barrels per day, but in recent months it has decreased to about 40,000-50,000 barrels per day.
Meanwhile, Russian heavy fuel exports to Singapore in April reached about 180,000 barrels per day, higher than the usual 100,000-150,000 barrels in 2025. However, by September, this amount had dropped to only 25,000 barrels per day due to disruptions in remaining exports caused by drone attacks in Ukraine. This reduction in supply has created a shortage in Singapore from two major sources.
Overall, despite disruptions in fuel supply, demand in Asia has remained steady. In September, Singapore sold 4.7 million tons of marine fuel, which is only 1% less than last year. Among this total, consumption has shifted towards high-sulfur heavy fuel, with sales from January to September increasing to about 17.5 million tons.
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