Two tankers loaded with
fuel from Reliance Industries in India that were headed to
Europe made u-turns and are now bound for Asia, according to two
trade sources and shiptracking data, as the refiner capitalises
on firm Asian margins with the Iran war squeezing supply.
The Advantage Life, which loaded around 100,000 metric tons
(745,000 barrels) of diesel at Reliance’s Jamnagar refinery on
February 28, is currently bound for Singapore, according to
Kpler, LSEG data and two trade sources.
The Navig8 Honor, which is carrying around 75,000 tons
(591,000 barrels) of jet fuel and was initially headed to
West-of-Suez markets, also turned around and is heading for
Southeast Asia, according to Kpler shiptracking data and one of
the two sources.
Reliance did not immediately respond to a Reuters request
for comment.
Asian buyers are rushing to secure fuel supplies to offset
production losses from expected refinery run cuts as the
near-halt in traffic in the Strait of Hormuz constrains oil
supply to the region.
Singapore jet fuel refining margins hit a record on March 5
of $80 a barrel.
Arbitrage margins favour sending jet fuel barrels from India
to Asia rather than Europe now, given the tightening supply in
East-of-Suez markets, according to Vortexa’s head of APAC
analysis Ivan Mathews.
Asia’s jet fuel production is expected to drop on “lower
crude flows to Asia, prompting refinery run cuts and weaker fuel
output in the region,” while “restrictions in Strait of Hormuz
flows will reduce Middle East Gulf exports” and further tighten
availability, he added.
Reliance has this week been offering spot diesel and jet
fuel loading from end-March to a handful of buyers in Asia,
cashing in on the higher premiums and urgent demand, four other
sources with knowledge of the activities said.
Discussions were at premiums of $15 to $17 per barrel,
linked to Middle East prices on a free-on-board basis, two of
the four sources said, compared with small premiums in February.
Indian refiners are buying prompt Russian crude oil cargoes
as the South Asian nation seeks to navigate an oil supply
crunch, with the U.S. Treasury Departmentgranting a 30-day
waiver on Thursday allowing India to buy Russian oil stuck at
sea.
OTHER TANKERS ALSO U-TURN
Two other jet fuel tankers, the Elandra Tern and the Burri,
also turned towards Asia from their original destination of
Europe, the sources said.
The two vessels had loaded jet fuel from either Duqm port in
Oman or Ruwais in Abu Dhabi before the war in Iran started on
February 28, according to Kpler data and two trade sources.