In February 2025, Singapore is anticipated to import around 6.7 million barrels of diesel, reaching a two-year high, as reported by Kpler and LSEG. In contrast, diesel exports are expected to decrease to approximately 3.9 million barrels, the lowest level in a year.
The rise in imports is largely due to increased shipments from South Korea and Taiwan. LSEG Oil Research senior analyst Charles Ong has observed that these cargoes may have “limited places to go,” as demand from important markets like Australia has been partly fulfilled by shipments from India. Moreover, diminished demand from countries such as Vietnam and the Philippines has shifted diesel supplies toward Singapore.
This increase in imports has contributed to a surplus in the Asian diesel market, thereby placing downward pressure on free-on-board (FOB) Singapore prices and expanding the East-West arbitrage spread. The widening spread has encouraged some sellers to contemplate redirecting cargoes to Western markets. In particular, a larger volume of Indian-origin barrels is anticipated to be directed to Europe in the latter half of February.
Key companies involved in facilitating these imports include Shell, Aramco Trading Singapore, Trafigura, and Vitol. Shell’s increased purchasing may be related to its ongoing transfer of its Singapore refinery to a joint venture led by Chandra Asri. This transition entails allocating about 20% of the refinery’s output to Shell, with the acquisition expected to be finalized in the first quarter of 2025.
In summary, the interplay of abundant supply and evolving trade patterns has notably influenced Singapore’s diesel import and export situation in February.
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