Marine fuel providers
face tighter supply of higher-density, low-sulphur crude oil,
known as heavy sweet, for blending because of competition from
refiners for the same oil as the Iran war disrupts Middle East
imports, industry sources said.
The reduced availability of fuel blending components is
occurring at the same time refiners are reducing low-sulphur
fuel oil (LSFO) production for marine fuel because of crude
shortages, which is supporting spot premiums for the residual
fuel used to power ships.
Crude grades such as Dar Blend from South Sudan and
Australia’s Vincent and Pyrenees are typically exported to
Singapore and Fujairah in the United Arab Emirates because their
low-sulphur content and overall characteristics make for easier
blending with other fuels to craft 0.5 per cent-sulphur fuel oil, known
as very low-sulphur fuel oil (VLSFO), for ship refuelling.
Since the Iran war began on February 28, some of that supply
has been diverted to refineries to make up for disrupted Middle
East supply, according to multiple industry sources and
ship-tracking data.
China has imported more than 300,000 metric tonne (2.19
million barrels) per month of Dar Blend during March and April,
up from none in February, Kpler data showed.
“As refineries are running at lower intake due to shortage
of medium sour crude from the Middle East, they will need to
pull in heavier crude alternatives including sweet barrels that
can support maintaining runs,” said June Goh, a senior analyst
at Sparta Commodities.
LIMITED HEAVY SWEET CRUDE SUPPLY
The supply of heavy sweet crude was fairly low even before
the war because of the limited output at the small number of
fields where it is found.
Since the war, the oil has become more expensive, making it
tough to find sufficient supply to blend and produce VLSFO this
month, said a Singapore-based trader active in the market.
“The loss of medium sour crudes and (refinery) run cuts may
divert heavy sweet crudes into the refinery, leaving less
low-sulphur blendstock in the market,” said Emril Jamil, a
senior analyst at LSEG.
The run cuts will also cause refiners to prioritise
distillate fuel output such as diesel and jet fuel over LSFO,
reducing supply for bunkers, he said.
While a surge in Brazilian imports has cooled spot VLSFO
premiums from all-time highs of nearly $140 a metric ton on
March 18, they remained above $17, versus pre-war levels of $2.
The shortage of blendstocks may also push blenders to use
unconventional oil, fuel experts said, which may cause quality
issues that can damage ship engines.
“With supply constrained by West Asia tensions and
disruptions around the Strait of Hormuz, the use of
unconventional feedstocks is a predictable response,” said Chris
Turner, technical manager at Integr8 Fuels.
“This isn’t an isolated lapse in quality, but a technical
consequence of market stress, one we have seen repeat across
every major disruption in the past decade,” Turner added.
Vessels should seek clarification from suppliers regarding
the blend components used, including the use of alternative
feedstocks, fuel testing agency VPS said in a notice this month.
Published on April 21, 2026
