Reliance Diverts Fuel Tankers to Asia Amid Supply Crunch
Reliance is rerouting fuel tankers from Europe to Asia to capture high regional margins. This move follows supply disruptions caused by the Iran conflict.
Two tankers loaded with fuel from RELIANCE INDUSTRIES LTD in India that were originally destined for Europe have performed U-turns and are now heading toward Asian markets. This strategic shift allows the refiner to take advantage of robust Asian margins as the ongoing conflict involving Iran continues to squeeze regional energy supplies. The Advantage Life, which loaded roughly 100,000 metric tons of diesel at the Jamnagar refinery, is currently bound for Singapore. Meanwhile, the Navig8 Honor, carrying 75,000 tons of jet fuel, has also changed course toward Southeast Asia. These diversions occur as Asian buyers rush to offset production losses resulting from expected refinery run cuts, particularly as traffic through the Strait of Hormuz remains constrained. Market conditions have shifted significantly, with jet fuel refining margins in the region reaching a record $80 per barrel on March 5. This trend is further supported by the current pricing of Brent Crude Oil and the resulting arbitrage opportunities. > "Arbitrage margins favour sending jet fuel barrels from India to Asia rather than Europe now, given the tightening supply in East-of-Suez markets, according to Vortexas head of APAC analysis Ivan Mathews." In response to the urgent demand, Reliance Industries has been offering spot diesel and jet fuel for late March loading at premiums ranging from $15 to $17 per barrel. These figures represent a sharp increase from the nominal premiums recorded in February. To navigate the broader supply crunch, Indian refiners have also turned to prompt crude cargoes from Russia. This procurement was facilitated after the United States Treasury Department granted a 30-day waiver for oil previously stuck at sea. The trend of diverting vessels is not limited to Reliance. Two other tankers, the Elandra Tern and the Burri, have similarly turned toward Asia after loading jet fuel in Oman and the United Arab Emirates. These vessels were initially bound for Europe but shifted their routes as regional availability tightened following the start of hostilities on February 28.
