Middle East fuel oil exports rebound, remain below pre-war levels

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Singapore: According to trade sources and shipping data, Middle Eastern fuel oil exports are expected to hit a four-month high in June as Saudi Arabia and Iraq shifted shipments to other ports and tanker traffic through the Strait of Hormuz progressively restarted after a temporary peace agreement between the United States and Iran.

This month's exports are predicted to reach over 2.4 million metric tonnes (508,000 barrels per day), up more than 20% from May. The volume, however, is still well below the monthly average of 5.5–6 million tonnes prior to the war, underscoring the ongoing effects of regional violence on gasoline supplies.

Iraq saw a significant increase in exports by delivering fuel oil directly to Syria's Baniyas port, with shipments topping 600,000 tonnes, the largest ever reported. Saudi Arabia's exports from the Red Sea port of Yanbu reached a 5 month high, while Oman reported its highest monthly exports in nearly two years.

Analysts predict exports through the Strait of Hormuz to resume in the next weeks, but the pace is expected to be modest due to uncertainties surrounding the US-Iran peace accord and ongoing banking and payment barriers to Iranian exports. Rising regional refinery demand throughout the summer may also hinder further export increases.