Reuters
According to Energy Aspects’ forecast, the shortage could reach 218,000 barrels per day in the third quarter of 2026 — for the first time since the third quarter of 2025, reports Reuters.
This is due to a combination of military conflicts, disruptions at oil refineries and restrictions on maritime transport. At the same time, refineries are prioritising the production of more profitable diesel, petrol and jet fuel, whilst reducing the output of fuel oil, the publication notes.
The war in the Middle East has disrupted supplies of crude oil and petroleum products from the region, whilst Ukraine’s attacks on Russian oil refining infrastructure have reduced exports of Russian petroleum products. A further factor has been the reduction in refining capacity and exports in China.
Against a backdrop of petrol and diesel shortages, refiners have an added incentive to divert feedstock towards the production of these products. For example, the Nigerian Dangote refinery, with a capacity of 650,000 barrels per day, has increased its exports of diesel, petrol and jet fuel whilst simultaneously reducing its exports of fuel oil, Reuters reports.
Energy Aspects notes that record-low stocks of petrol and diesel are encouraging refineries to make greater use of fuel oil as feedstock for secondary processing, which further reduces its availability on the market.
According to Kpler, heavy fuel oil exports from Russia fell to a record low of 591,000 barrels per day in August, compared with an average of over 860,000 barrels per day in 2025. Fuel oil exports from the Middle East in March–August fell by 45 per cent year-on-year, to an average of 447,000 barrels per day.
The drop in supplies from the Al-Zour refinery in Kuwait – one of the major fuel oil exporters – was particularly marked. Since March, the facility has exported just one consignment of 26,000 barrels per day, whereas in January–February the figure stood at around 191,000 barrels per day.
Marine fuel prices are already rising
The reduction in supply is already affecting stocks and prices. Heavy fuel oil stocks in the world’s three major bunkering hubs – Singapore, the Amsterdam–Rotterdam–Antwerp region and Fujairah – are approximately 30 per cent below their three-year seasonal averages, the publication notes.
In Singapore, the world’s largest bunkering centre, the price of the main type of marine fuel – very low-sulphur fuel oil (VLSFO) – stood at just under $825 per metric tonne on 1 September, or around $130 per barrel. Since the start of the conflict with Iran, the price has risen by 76 per cent, whilst the price of benchmark Brent crude has increased by approximately 40 per cent over the same period.
Asia may prove to be the most vulnerable due to its high dependence on supplies from the Gulf states. In particular, Singapore imports more than half of the nearly 1 million barrels per day required for its bunker fuel market, according to data from Kpler.
The situation is further complicated by changes to shipping routes. To avoid the Bab el-Mandeb Strait and the Red Sea due to threats from the Houthis, vessels are forced to take longer routes, which increases fuel consumption.
The fuel shortage could drive up freight costs
For shipping companies, rising bunker fuel costs mean higher operating expenses. Reuters notes that the rise in fuel prices may subsequently be reflected in sea freight rates.
Consequently, disruptions to oil refining are gradually spreading beyond the energy market. A shortage of any one type of petroleum product could increase the cost of maritime logistics, particularly if restrictions on the supply of raw materials and petroleum products persist.
For the time being, Energy Aspects forecasts a fuel oil shortage of 218,000 barrels per day in the third quarter. Rystad also expects the market to remain extremely tight due to protracted supply disruptions in the Middle East.
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