Feast MRs were minimally impacted from this USA-Iran war as compared to TC1/TC5/shipments out of AG affected by Iran pressure on Straits of Hormuz. Though bunkers are up two-fold, MR freight remains only about 10% up from pre-war levels.
Commentary
Feast MRs were minimally impacted from this USA-Iran war as compared to TC1/TC5/shipments out of AG affected by Iran pressure on Straits of Hormuz. Though bunkers are up two-fold, MR freight remains only about 10% up from pre-war levels.
OVERVIEW
As the US and Israeli air campaign against Iran enters its third week, Tehran has continued to strike out across the Middle East.
The attacks have not just been focused on the embattled Strait of Hormuz. They have spanned the full extent of the Middle East Gulf, and reached out into the Gulf of Oman.
Initially, Iran was mostly zeroing in on military infrastructure: interceptors, air defenses and communication systems, and bases. Then, it started hitting energy and water infrastructure, and airports.
It is also affecting its relationship with the other Gulf states. Tehran’s ambassador to Saudi Arabia mentioned Iran’s relations with Gulf states will require a “serious review” in light of the U.S.-Israeli war on Iran, limiting the power of external actors so the region can become prosperous. While the Gulf Arab seemed to condemned Iran, there is also growing frustration at the U.S., long their security guarantor, at dragging them into a war they did not endorse but for which they are paying a hefty price.
Global oil export is facing threats and there is no sign that Straits of Hormuz is back to normal activities except exceptionally few ships that has special permission to enter. According to reports, Iran is considering allowing Chinese-linked ships through the Strait of Hormuz.
Iran may grant safe passage to oil tankers if the cargo was traded in Chinese yuan. Granting Chinese-linked ships safe passage would spare Iran’s strategic ally the economic pain of the war, while doubling down on the impact felt by the West.
Two Indian oil tankers passed through the Strait of Hormuz last week amid the ongoing war involving the United States, Israel and Iran, and disruptions to shipping.
China might have a more bargaining power as it absorbs around 90% of Iran’s oil export. Due to the war, now it needs to add new sources for its cure oil stockpile. Accordingly to researchers at Columbia University, China has about 1.4 billion barrels of crude or 190 million tons in strategic storage. Even if all the country’s imports from the Middle East were cut off, those stockpiles could cover the lost supplies for six months.
One of China’s alternatives are importing oil from Canada. China is taking full advantage of the Trans Mountain pipeline expansion, which opened in May 2024 to ferry oil from the vast Albertan oil sands to Canada’s Pacific coast.
The overwhelming majority of Canada’s oil is still sold south to the US. But since President Donald Trump spent much of 2025 imposing tariffs and talking about making Canada a US state, the country has embarked on a program of diversifying its trading partners away from its southern neighbor as a central policy of Prime Minister Mark Carney. That includes discussions around building a second pipeline to bring more of Alberta’s oil to Asian buyers.
The market is closely watching the crude supply recovery. If the refinery throughput is significantly below capacity, refined product availability could tighten further, product supply could remain constrained, limiting cargo availability and placing downward pressure on freight activity in the near term.
Brent Crude oil last week was traded close to USD 100 per barrel. This would cascade towards the sharp rise in prices of consumer goods.
Source: Business Insider (Click here to read more)
Energy and commodity markets have been shaken since the conflict. Prices of gas, diesel and even fertilizers have also climbed, in addition to soaring freight costs, which threaten to filter through to prices consumers pay.
Jet fuel prices are soaring around the world as oil traders grapple with the fallout of the Iran war, adding to wider concerns about global inflation.
But the Iran war has turned the industry upside down. Fuel-oil supply is very low in two of the top-three bunkering locations: Singapore, and Fujairah in the United Arab Emirates.
Disruptions to Middle East exports and the effective closure of the Strait of Hormuz have sharply reduced fuel-oil flows into Asia, with tanker movements through the route reportedly falling by as much as 90%.
The situation has been exacerbated by drone attacks and operational disruptions at Fujairah, forcing bunker suppliers to slow or suspend loadings while prices surge.
At the same time, Southeast Asian refineries have reduced throughput due to crude feedstock shortages, tightening regional supply further.
As a result, bunker premiums have spiked and shipowners are increasingly scrambling for fuel, with some vessels even struggling to secure bunkers at Singapore despite its status as the world’s largest refuelling hub.
The Iran war is severely affecting emerging economies such as Indonesia, which are highly dependent on imported energy. As global oil prices surge and supply disruptions intensify, Indonesia faces rising fuel subsidy costs, weakening currency pressures, and higher inflation that could strain government finances and domestic consumption.
As Southeast Asia’s largest economy, Indonesia is the biggest importer of oil products in the region, sourcing much of that from supply now disrupted by the war. Fuel stockpiles in nearby Singapore which sells to its neighbor are currently above average, but Indonesia’s own reserves are among the lowest in the region. That gives it little room to handle disruptions, even as the war heads into its third week.
From a shipping perspective, this growing import dependency is likely to sustain regional tanker demand as Indonesia continues to source refined products and feedstocks from the Middle East and North Asia.
MR MARKET OUTLOOK FOR THE NEXT 5-7 DAYS
North Asia and Korea-origin routes most likely to be firmer than India-linked routes. Jet, gasoil, gasoline replacement flows into Northeast and Southeast Asia but gains may be uneven because bunker cost inflation and port waiting time are now part of the freight equation. If fresh disruptions hit Fujairah, Ruwais, or regional bunkering again, MR could squeeze higher quickly.
However, the SK-Oz run might face headwinds as Australia’s top fuel suppliers have halted spot sales as supply tightens due to global energy market disruptions stemming from conflict in the Middle East.
Australia’s two main refineries : Viva’s Geelong and Ampol’s Lytton, produce about 20% of the nation’s fuel, with the rest mainly coming from imports within the region under long-term contracts.
Regional replacement demand and bunker dislocation keep nearby intra-Asia routes supported, but reduced refinery throughput and export uncertainty cap upside for longer-haul MR cargoes.
Meanwhile, South Korea will use extra tax revenue to fund a supplementary budget to cushion households and businesses from surging oil prices triggered by the Iran war.
However South Korean shipping company, Sinokor Merchant Marine found a silver lining amidst the war chaos. In the weeks before the war, the group had moved at least six empty supertankers into the Persian Gulf, where they sat idle waiting for cargoes. Now, with exports through the strait choked off and regional storage fast filling up, Sinokor is hiring ships out at eye-popping rates of $500,000 a day to hold oil, almost 10 times the level of last year.
LR freight is likely to remain soft and volatile in the coming week unless export activity from the Gulf starts to recover. The main issue at the moment is not demand for products, but the disruption to cargo loadings from the Gulf. While the conflict in the Middle East has pushed oil prices higher, it has not automatically translated into stronger LR freight as physical cargo availability remains uncertain. For now, the market is expected to remain very headline-driven, with rates moving quickly on news flow, but overall sentiment may stay capped unless we see a clearer recovery in Gulf export programs.
Besides the UAE’s Fujairah, Saudi Arabia’s Ras Tanura export terminal and Abqaiq oil processing facilities have been listed as critical and highly vulnerable energy nodes in the Gulf. However, oil loading operations at Fujairah have resumed. Overall, Feast MRs were minimally impacted from this USA-Iran war as compared to TC1/TC5/shipments out of AG affected by Iran pressure on Straits of Hormuz. Though bunkers are up two-fold but MR freight remains only about 10% up from pre-war levels, as major exporter like China are cancelling cargoes and we see ships are coming into the market prompt.
SMALL TANKERS OVERVIEW
Intra-SEA activity has slowed noticeably as exports are delayed or cancelled, resulting in a growing list of open vessels, yet freight has moved higher due to sharply rising bunker prices and increased operational risk. Northbound and Westbound trades remain subdued with fewer stems available, although rates have held steady as owners resist fixing lower amid cost pressure and uncertain backhaul prospects. In the Far East, Intra-FEAST activity is still relatively firm as many vessels were fixed forward before the disruption, leaving limited prompt availability, while weather delays and feedstock shortages continue to affect schedules. Southbound and Westbound routes show weak cargo flow but significantly higher freight ideas, with owners quoting well above previous levels mainly to cover bunker costs and repositioning risk rather than due to tight tonnage. Overall, freight across the region has firmed despite softer demand, with rate direction now driven more by fuel costs and geopolitical uncertainty than by actual vessel supply.
Palm oil demand into China continues to be slow, though there are signs of slightly improved interest into India. Freight for India-bound shipments has remained relatively stable despite the current geopolitical situation, with a J19 unit for West Coast India still indicated around the mid-$40s/mt, not significantly different from levels seen prior to the recent conflict at around mid $30s/mt.
Due to the war, palm oil is now near parity (or even cheaper) than gasoil. The narrowing differential is making margins for biofuels production more attractive. Large volumes of palm oil are funneled into crop-based fuels, especially in top grower Indonesia.
News & Commentaries
Feast MRs were minimally impacted from this USA-Iran war as compared to TC1/TC5/shipments out of AG affected by Iran pressure on Straits of Hormuz. Though bunkers are up two-fold, MR freight remains only about 10% up from pre-war levels.
As the US and Israeli air campaign against Iran enters its third week, Tehran has continued to strike out across the Middle East.
The attacks have not just been focused on the embattled Strait of Hormuz. They have spanned the full extent of the Middle East Gulf, and reached out into the Gulf of Oman.
Initially, Iran was mostly zeroing in on military infrastructure: interceptors, air defenses and communication systems, and bases. Then, it started hitting energy and water infrastructure, and airports.
It is also affecting its relationship with the other Gulf states. Tehran’s ambassador to Saudi Arabia mentioned Iran’s relations with Gulf states will require a “serious review” in light of the U.S.-Israeli war on Iran, limiting the power of external actors so the region can become prosperous. While the Gulf Arab seemed to condemned Iran, there is also growing frustration at the U.S., long their security guarantor, at dragging them into a war they did not endorse but for which they are paying a hefty price.
Global oil export is facing threats and there is no sign that Straits of Hormuz is back to normal activities except exceptionally few ships that has special permission to enter. According to reports, Iran is considering allowing Chinese-linked ships through the Strait of Hormuz.
Iran may grant safe passage to oil tankers if the cargo was traded in Chinese yuan. Granting Chinese-linked ships safe passage would spare Iran’s strategic ally the economic pain of the war, while doubling down on the impact felt by the West.
Two Indian oil tankers passed through the Strait of Hormuz last week amid the ongoing war involving the United States, Israel and Iran, and disruptions to shipping.
Both vessels were said to have transited the strait safely after diplomatic talks between India and Iran about ensuring safe maritime movement.
China might have a more bargaining power as it absorbs around 90% of Iran’s oil export. Due to the war, now it needs to add new sources for its cure oil stockpile. Accordingly to researchers at Columbia University, China has about 1.4 billion barrels of crude or 190 million tons in strategic storage. Even if all the country’s imports from the Middle East were cut off, those stockpiles could cover the lost supplies for six months.
One of China’s alternatives are importing oil from Canada. China is taking full advantage of the Trans Mountain pipeline expansion, which opened in May 2024 to ferry oil from the vast Albertan oil sands to Canada’s Pacific coast.
The overwhelming majority of Canada’s oil is still sold south to the US. But since President Donald Trump spent much of 2025 imposing tariffs and talking about making Canada a US state, the country has embarked on a program of diversifying its trading partners away from its southern neighbor as a central policy of Prime Minister Mark Carney. That includes discussions around building a second pipeline to bring more of Alberta’s oil to Asian buyers.
The market is closely watching the crude supply recovery. If the refinery throughput is significantly below capacity, refined product availability could tighten further, product supply could remain constrained, limiting cargo availability and placing downward pressure on freight activity in the near term.
Brent Crude oil last week was traded close to USD 100 per barrel. This would cascade towards the sharp rise in prices of consumer goods.
Source: Business Insider (Click here to read more)
Energy and commodity markets have been shaken since the conflict. Prices of gas, diesel and even fertilizers have also climbed, in addition to soaring freight costs, which threaten to filter through to prices consumers pay.
Jet fuel prices are soaring around the world as oil traders grapple with the fallout of the Iran war, adding to wider concerns about global inflation.
But the Iran war has turned the industry upside down. Fuel-oil supply is very low in two of the top-three bunkering locations: Singapore, and Fujairah in the United Arab Emirates.
Disruptions to Middle East exports and the effective closure of the Strait of Hormuz have sharply reduced fuel-oil flows into Asia, with tanker movements through the route reportedly falling by as much as 90%.
The situation has been exacerbated by drone attacks and operational disruptions at Fujairah, forcing bunker suppliers to slow or suspend loadings while prices surge.
At the same time, Southeast Asian refineries have reduced throughput due to crude feedstock shortages, tightening regional supply further.
As a result, bunker premiums have spiked and shipowners are increasingly scrambling for fuel, with some vessels even struggling to secure bunkers at Singapore despite its status as the world’s largest refuelling hub.
The Iran war is severely affecting emerging economies such as Indonesia, which are highly dependent on imported energy. As global oil prices surge and supply disruptions intensify, Indonesia faces rising fuel subsidy costs, weakening currency pressures, and higher inflation that could strain government finances and domestic consumption.
As Southeast Asia’s largest economy, Indonesia is the biggest importer of oil products in the region, sourcing much of that from supply now disrupted by the war. Fuel stockpiles in nearby Singapore which sells to its neighbor are currently above average, but Indonesia’s own reserves are among the lowest in the region. That gives it little room to handle disruptions, even as the war heads into its third week.
From a shipping perspective, this growing import dependency is likely to sustain regional tanker demand as Indonesia continues to source refined products and feedstocks from the Middle East and North Asia.
North Asia and Korea-origin routes most likely to be firmer than India-linked routes. Jet, gasoil, gasoline replacement flows into Northeast and Southeast Asia but gains may be uneven because bunker cost inflation and port waiting time are now part of the freight equation. If fresh disruptions hit Fujairah, Ruwais, or regional bunkering again, MR could squeeze higher quickly.
However, the SK-Oz run might face headwinds as Australia’s top fuel suppliers have halted spot sales as supply tightens due to global energy market disruptions stemming from conflict in the Middle East.
Australia’s two main refineries : Viva’s Geelong and Ampol’s Lytton, produce about 20% of the nation’s fuel, with the rest mainly coming from imports within the region under long-term contracts.
Regional replacement demand and bunker dislocation keep nearby intra-Asia routes supported, but reduced refinery throughput and export uncertainty cap upside for longer-haul MR cargoes.
Meanwhile, South Korea will use extra tax revenue to fund a supplementary budget to cushion households and businesses from surging oil prices triggered by the Iran war.
However South Korean shipping company, Sinokor Merchant Marine found a silver lining amidst the war chaos. In the weeks before the war, the group had moved at least six empty supertankers into the Persian Gulf, where they sat idle waiting for cargoes. Now, with exports through the strait choked off and regional storage fast filling up, Sinokor is hiring ships out at eye-popping rates of $500,000 a day to hold oil, almost 10 times the level of last year.
LR freight is likely to remain soft and volatile in the coming week unless export activity from the Gulf starts to recover. The main issue at the moment is not demand for products, but the disruption to cargo loadings from the Gulf. While the conflict in the Middle East has pushed oil prices higher, it has not automatically translated into stronger LR freight as physical cargo availability remains uncertain. For now, the market is expected to remain very headline-driven, with rates moving quickly on news flow, but overall sentiment may stay capped unless we see a clearer recovery in Gulf export programs.
Besides the UAE’s Fujairah, Saudi Arabia’s Ras Tanura export terminal and Abqaiq oil processing facilities have been listed as critical and highly vulnerable energy nodes in the Gulf. However, oil loading operations at Fujairah have resumed. Overall, Feast MRs were minimally impacted from this USA-Iran war as compared to TC1/TC5/shipments out of AG affected by Iran pressure on Straits of Hormuz. Though bunkers are up two-fold but MR freight remains only about 10% up from pre-war levels, as major exporter like China are cancelling cargoes and we see ships are coming into the market prompt.
Intra-SEA activity has slowed noticeably as exports are delayed or cancelled, resulting in a growing list of open vessels, yet freight has moved higher due to sharply rising bunker prices and increased operational risk. Northbound and Westbound trades remain subdued with fewer stems available, although rates have held steady as owners resist fixing lower amid cost pressure and uncertain backhaul prospects. In the Far East, Intra-FEAST activity is still relatively firm as many vessels were fixed forward before the disruption, leaving limited prompt availability, while weather delays and feedstock shortages continue to affect schedules. Southbound and Westbound routes show weak cargo flow but significantly higher freight ideas, with owners quoting well above previous levels mainly to cover bunker costs and repositioning risk rather than due to tight tonnage. Overall, freight across the region has firmed despite softer demand, with rate direction now driven more by fuel costs and geopolitical uncertainty than by actual vessel supply.
Palm oil demand into China continues to be slow, though there are signs of slightly improved interest into India. Freight for India-bound shipments has remained relatively stable despite the current geopolitical situation, with a J19 unit for West Coast India still indicated around the mid-$40s/mt, not significantly different from levels seen prior to the recent conflict at around mid $30s/mt.
Due to the war, palm oil is now near parity (or even cheaper) than gasoil. The narrowing differential is making margins for biofuels production more attractive. Large volumes of palm oil are funneled into crop-based fuels, especially in top grower Indonesia.