Middle East's Refined Fuel Exports Hit Historic Lows Amid Iran Conflict

Asia's imports of refined fuels have hit a post-war low in August, falling to 5.10 million barrels per day (bpd), down from 5.61 million bpd in July, according to data compiled by Kpler.

This decline is largely attributed to the loss of supply from the Middle East, which has been constrained due to the Iran conflict. The region's top buyer, China, has slashed its imports by nearly 4 million bpd and also drawn down on inventories.

The product market is struggling with the loss of cargoes from the Middle East and Russia, which has curtailed fuel shipments after Ukraine successfully struck several of its refineries. As a result, prices have skyrocketed, with Singapore gasoil ending at $155.15 a barrel on Monday, up 70% from where it was on February 27.

The profit margin for a typical Singapore refinery to produce a barrel of gasoil has ended at $67.93, three times more than the $21.90 that prevailed on February 27. Gasoline shows a similar dynamic, with the profit for making a barrel of the light motor fuel ending last week at $27.47, more than three times the $8.00 from the day before the conflict started.