By Trixie Yap
SINGAPORE (Reuters) – Singapore’s jet fuel imports likely reached multi-year highs in December, with India the main supplier, as arbitrage to Europe remained closed, according to trade sources and ship tracking data.
Jet fuel imports from Singapore are closely monitored by markets as the city-state is a major trading and storage center for refined fuel in Asia.
Strong supply to Singapore and expectations of higher exports from China after refineries received their first batch of the 2025 export quota last week could weigh on Asian spot fuel prices, said the sources, all of whom asked not to be identified.
Singapore’s jet fuel imports rose to 2.55 million barrels in December, up from around 2 million barrels the month before, estimates from LSEG, Kpler and trade sources show, with most of the supply coming from India and South Korea .
These volumes were the highest in almost five years, Kpler data showed.
India shifted its jet fuel and kerosene exports from Europe to the rest of Asia as the east-west arbitrage remained closed, FGE analyst Liu Xuanting said in a note.
The increase in supply has caused the revaluation to turn negative since mid-December, she added.
The regrade, a difference between the prices of jet fuel and gas oil with 10 ppm sulfur, averaged discounts of 80 cents per barrel over the past two weeks, compared to November’s average premium of 80 cents.
Indian refiners typically sell refined products through spottenders to traders who send these volumes to Asia or Northwestern Europe, depending on arbitrage opportunities.
Indian exports to Asia reached their highest level in several years in November, as the country exported nothing to northwestern Europe.
December exports to northwestern Europe were around 1 million barrels, little changed from a two-year low in October, ship tracking data from LSEG and Kpler showed.
Some refineries in Northeast Asia have also switched to selling jet fuel instead of diesel in the past two months, lured by better margins, a Northeast Asia source said.
Price differences between East and West still indicate that the East is a preferred destination for loading January cargoes, two analysts said.
Some barrels from India will continue to reach Asian shores this month as buying activity from northwest Europe takes some time to pick up and Asian prices need to weaken further before the arbitrage window can reopen, one of the Singapore-based trading sources. said.
About 600,000 barrels of Indian jet fuel will go to Southeast Asia and Australia in January, a source at the shipping broker said.
However, some traders expect jet fuel flows from the Middle East and India to northwestern Europe to emerge soon, as inventories at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage center near their lowest level in eight months. [ARA/]
Chinese barrels will keep Asian markets fully supplied for the next two months and swing suppliers may eventually find demand outlets in the west again, a third trading source said.
