By TRIXIE YAP
SINGAPORE — Traders shipped the most jet fuel from Northeast Asia to Europe in almost a year in June as lower freight rates and ample Asian supplies spurred exports, according to ship trackers and three trade sources, amid fears of a Middle East supply disruption.
Some 350,000 metric tons (2.8 million barrels) of aviation fuel is heading to Europe from South Korea and China, Kpler data showed, with some trader estimates at 465,000 tons for bookings made in June.
These shipments are expected to slightly ease Asia’s jet fuel oversupply and provide a floor to prices in the near term, analysts said.
Vitol, BP, Aramco Trading, Gunvor and Unipec, the trading arm of Asia’s largest refiner Sinopec, chartered the five tankers that loaded in June, the data showed.
Vitol and Saudi Aramco declined to comment on the matter, while Gunvor, Unipec and BP did not immediately respond to requests for comment.
Northeast Asia jet fuel exports rose in June as refiners increased production after completing maintenance at their plants and as “product cracks” strengthened, Vortexa’s head of APAC analysis Ivan Mathews said, referring to fuel profit margins.
Traders mainly pivoted their spot cargoes to the West to cash in on lucrative margins and a drop in freight rates, given a lack of spot buying interest from regional importers recently, two Singapore-based trade sources said.
These trade flows “were purely opportunistic, spurred by geopolitical tensions that sent Northwest Europe cracks surging, while freight rates on modern newbuild vessels remained attractive enough to justify the move”, said Kpler senior lead research analyst Zameer Yusof.
