Shipments of diesel and jet fuel from East Asia to Europe are set to stay low for a while yet, potentially aiding hard-pressed European refiners. Only two ships hauling about 160,000 tons of fuel have sailed the route so far this month and just one, the Navig8 Pride LHJ, is currently booked to make the voyage in the coming weeks, according to fixture lists and tanker-tracking data compiled by Bloomberg. That’s a sharp contrast with the May-June period, when in excess of two million tons arrived in Europe from East Asia, more than the combined arrivals for the whole of January-April.
“We might not see more loadings from East for Europe until next month,” said Sandra Octavia, an oil product analyst at Energy Aspects Ltd. China is likely to boost exports in August, which could push down prices in East Asia to a level that would make it profitable to ship fuel to Europe, she said.
Europe’s Diesel Margin Still a Long Way From Recovery
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For Europe’s beleaguered refiners, who have been hit by cratering demand because of the pandemic and face a continent awash with fuel, fewer arrivals are likely to be welcome. Some of May-June’s deluge is still floating aboard ships off the coast of northwest Europe, diesel and jet fuel margins are well below seasonal norms and both are still in a contango structure, where prompt contracts are cheaper than those for sale at a later date.