April Recap - Asia Fuel Oil

Singapore fuel oil partially unwound March's record strength in April, with 380cst HSFO averaged $656.35/MT (-5.21% MoM) and 0.5% VLSFO averaged $736.03/MT (-11.78% MoM). In comparison, average Dubai crude eased 17.89% MoM to $105.74/bbl. Progress in US-Iran peace talks drove the unwind despite the absence of meaningful concessions on either side; however, the willingness of both sides to maintain dialogue relieved the war risk premium and prevent prices from retesting March highs even after the 21-Apr expiration of the two-week ceasefire. HSFO held up materially better than VLSFO due to a sharply asymmetric supply shock: Singapore HSFO arrivals fell approximately 1.09 MT in April versus only 200 KT for VLSFO. This drove HSFO swap backwardation to steepen while VLSFO flattened, and Hi-5 compressed 43.85% MoM as VLSFO unwound its March premium while HSFO held firm on tight supply and growing bunker demand.​

Market Activity

• ​Aramco dominated HSFO buy side with 75% of physical volume; VLSFO sellers rotated as Trafigura turned net seller.
• ​380cst HSFO: 20 executed physical cargoes in April (vs 10 in March):
  
  • ​Aramco (combining ARAMCO and ARAMCOSG entities) the dominant buyer with 15 of 20 cargoes (75% of physical volume), a sharp shift from March when Chimbusco and PetroChina led the buy side.
• 0.5% VLSFO: 19 executed physical cargoes in April (vs 12 in March).

Price Action

• ​Both grades opened at March-spike levels, crashed on 8-Apr ceasefire announcement, troughed on 21-Apr, recovered into month-end with HSFO outperforming VLSFO.
• ​380cst HSFO opened at $656.31/MT (01-Apr), peaked $728.83/MT (02-Apr), troughed $590.42/MT (21-Apr), closed $706.35/MT (30-Apr); monthly avg $656.35/MT, -$36.11/MT (-5.21%) MoM, +$50.04/MT (+7.62%) open-to-close.
  
  • ​Second-highest monthly average since May 2022.
• 0.5% VLSFO opened at $822.10/MT (01-Apr), peaked $858.48/MT (02-Apr), troughed $643.01/MT (21-Apr), closed $788.24/MT (30-Apr); monthly avg $736.03/MT, -$98.33/MT (-11.78%) MoM, -$33.86/MT (-4.12%) open-to-close.

380cst HSFO:

0.5% VLSFO:

Cross-Market Dynamics

• 380cst HSFO crack vs Dubai recovered $17.17/bbl MoM and briefly turned positive on 14-Apr at +$0.59/bbl, the first positive HSFO crack reading of 2026.
• ​Relatively weak VLSFO bunker demand drove faster VLSFO price decline; cracks recovered sharply and Hi-5 compressed 43.97%.
• The faster VLSFO decline reflects relatively weak VLSFO bunker demand against firm 380cst HSFO bunker demand; the asymmetry in demand pulled VLSFO down faster than HSFO and drove the cross-product spread compression:
  
  • ​March Bunker sales in Singapore has increased 130KT month-on-month, 79% of which is attributed to HSFO, indicating stronger incremental demand for HSFO bunker fuels​.

Cross-Regional Dynamics

• ​​HSFO arrivals fell sharply on combined Middle East and Russian losses; VLSFO arrivals materially more resilient; supply asymmetry the cleanest driver of inter-grade divergence.
• Singapore HSFO arrivals declined approximately 1.09MT in April, of which 750KT comes from Middle East and 100KT from Russia.
• ​Singapore VLSFO arrivals remain resilient, with only 200KT drop in April despite loss of Middle East supplies; Brazil and Netherlands remains the two largest suppliers following closure of Straits of Hormuz​.

Curve Structure

• ​​HSFO and VLSFO swap curves diverged sharply; HSFO backwardation steepened progressively along the curve while VLSFO flattened across all tenors.
• ​HSFO steepening intensifies progressively along the curve (+$4 at M1-M2, +$19 at M1-M6, +$24 at M1-M12), consistent with the paper market pricing sustained near-term tightness.
• VLSFO flattening uniform across M1-M6 and M1-M12 (-$38 each); back-end prices held steady while the front weakened on soft bunker demand.

0.5% VLSFO swaps (USD/MT)

Price Volatility

• ​​April CV roughly halved from March's record but remains the second-highest reading of the past six months for both grades.
• ​VLSFO CV exceeded HSFO for the third consecutive month, consistent with the larger absolute price swings tracked in the flat-price section ($215.43/MT VLSFO range vs $138.37/MT HSFO range).
  
  • HSFO CV fell 7.24pp MoM from 13.00% to 5.76%; VLSFO CV fell 6.94pp from 15.28% to 8.34%.
• Despite the pullback, both readings remain materially elevated relative to the November-February 2026 range of 1.52% to 7.05% and well above the 1-4% historical band for both grades pre-2026.

Something to Watch

• From May onwards the pre-closure cargo cushion is exhausted, and the effective Strait of Hormuz closure since March will bite directly into Singapore arrivals; HSFO supply tightness has further to run. Logistics of Strait of Hormuz remains the key thing to watch.
• ​Multiple refineries in Russia were reportedly hit by Ukraine, reflected by 100KT HSFO loss from Russia to Singapore in April. Russia flows of HSFO remains the dominant supply driver for Singapore fuel oil market following the loss of Middle East supplies.​

Note: All figures, prices and market activity referenced in this report are based on the period 1–30 April 2026.