MR freight is likely to hold firm with mild upward bias, rather than extend another sharp rally.
Commentary
MR freight is likely to hold firm with mild upward bias, rather than extend another sharp rally.
MR Market Outlook – Next 5–7 Days Base case: Range-bound but supported. MR freight is likely to hold firm with mild upward bias, rather than extend another sharp rally. The recent gains (3–10% WoW across key Asia-Pacific MR routes) have already priced in tighter prompt tonnage and active regional demand. Unless there is a fresh cargo push, rates may consolidate around current levels, with day-to-day volatility rather than a straight-line move higher.
MR tanker freight firmed across Asia-Pacific for the past week, with Platts last week assessments showing solid week-on-week gains on core MR routes such as Spore/Oz, SK/Oz and India/Japan, despite some marginal day-to-day softness. The strength reflects tighter prompt tonnage, short-haul regional demand and seasonal refinery movements in North Asia and India, which continue to support clean product flows. At the macro level, oil prices remain under pressure from ample global supply and inventory builds heading into 2026, but lower outright prices have helped sustain product trading activity and regional arbitrage, partially decoupling MR freight from crude price weakness.
Geopolitically, elevated risk premiums are underpinning freight sentiment, particularly across politically sensitive basins. Ongoing tensions in the Middle East, sanctions enforcement and disruptions around Venezuela continue to constrain effective vessel supply and inject volatility into tanker deployment decisions. While global demand growth remains modest and inventories comfortable, these micro-level disruptions, combined with active intra-Asia trading and limited MR availability, are keeping freight levels supported in the near term. Overall, the MR market is expected to remain range-bound but firm, with volatility driven more by regional supply-demand imbalances and geopolitical developments than by outright oil prices.
Exports have stabilised while freight has become more range-bound, highlighting that current shipping markets are being shaped as much by regional imbalances and geopolitical risk as by pure trade volumes.
Small Tankers Overview The Southeast Asia and Far East markets present a mixed but generally balanced picture this week. Intra-SEA activity remains driven by CPP COA volumes, with persistent congestion—particularly at Singapore, Pengerang and Jakarta—creating demand for prompt replacement tonnage, especially for 100kb vessels, while chemical and palm spot activity stays subdued. Northbound sentiment remains soft, with January largely covered and attention shifting to February, as owners struggle to fill remaining space and prioritize firmer short-haul intra-SEA employment. In the Far East, winter conditions and weather disruptions have tightened availability on selected routes, supporting firm freight, although activity is expected to slow approaching Lunar New Year. Southbound trade is led by MTBE and caustic soda, with owners increasingly relying on part-cargo employment, while westbound flows remain thin and increasingly skewed toward ARA rather than regional destinations. Overall, freight levels are holding at last-done, but with vessel supply outweighing cargo availability, downside pressure—particularly on smaller parcels—may emerge if demand does not improve
Bunker Recent Trend and Forecast for Early 2026: A widening of the price spread typically makes it more lucrative for traders to send more fuel oil to Asia. (Source : Reuters)
TREND SUMMARY
Very Low Sulphur Fuel Oil (VLSFO)
Trend: Prices generally moved lower, with some small fluctuations in the middle of the week.
7-day change: Negative across all main bunkering hubs.
Interpretation: The softer VLSFO market reflects overall weakness in refined fuel prices and weaker crude oil fundamentals.
Marine Gas Oil (MGO)
Trend: Prices declined in most regions. Singapore recorded the largest drop, showing weaker buying interest and softer diesel market conditions.
7-day change: Mostly negative, except for Rotterdam which was more stable.
Interpretation: MGO experienced the biggest price fall among the bunker grades, especially in Asia. This suggests weaker distillate crack spreads and lower marine demand compared to VLSFO and HSFO.
Intermediate Fuel Oil (IFO 380 / HSFO)
Trend: Prices recovered slightly in the middle of the week but ended the period lower compared to the start.
7-day change: Negative in most major hubs, except Singapore.
Interpretation: HSFO prices remain under pressure due to weak crack spreads and lower demand compared with VLSFO and MGO.
UNDERLYING MARKET DRIVERS
Oversupply and Weak Crude Fundamentals
Global oil markets continue to face oversupply heading into 2026, with crude supply expected to remain high while demand growth slows.
Several reports indicate that global oil supply may exceed demand, putting further pressure on prices.
Impact on bunker fuels: Lower crude prices reduce refinery margins, leading to weaker prices for refined products such as VLSFO and MGO. This is reflected in softer bunker prices in Singapore, Fujairah, and the global market.
OPEC and Production Dynamics
OPEC oil output declined in December 2025, mainly due to lower production from Iran and Venezuela.
However, the overall market outlook still shows sufficient supply and high inventory levels, keeping pressure on oil prices and refined products.
Impact: The temporary price increase seen mid-week in some HSFO markets (e.g. Singapore) may be linked to short-term geopolitical concerns, but the overall downward trend remained.
Product Market Weakness
According to EIA forecasts, oil product markets are facing oversupply and weak demand growth.
MGO, which is closely linked to diesel and other middle distillates, was particularly weak, pointing to soft distillate crack spreads and reduced shipping demand.
Regional Regulatory and Blending Effects
In Europe, especially Rotterdam, biofuel costs and blending requirements have affected low-carbon bunker pricing.
Changes in blending economics and feedstock availability can lead to localized price pressure on VLSFO, as seen in the slight declines in Rotterdam.
MARKET IMPLICATIONS
Short-Term Outlook
Demand indicators remain weak as the global economy is still sluggish and distillate demand is soft.
Crude oil fundamentals remain bearish due to oversupply and rising inventories.
Refining margins are under pressure, especially for middle distillates.
Overall result: Bunker prices are expected to stay weak or move sideways, with only short-term rebounds caused by local supply or demand factors.
Key Risks to Watch
Further global oversupply: If inventories continue to build faster than expected, bunker prices could face more downside pressure.
Geopolitical disruptions: Events such as sanctions or supply outages may cause short-term price spikes in HSFO or VLSFO.
Seasonal shipping patterns: Winter demand and changes in vessel deployment (e.g. Panamax or VLCC trades) may temporarily affect bunker demand in certain regions.
CONCLUSIONS
Bunker prices for VLSFO, MGO, and IFO 380 generally trended lower during the period.
MGO was the weakest grade, reflecting poor diesel crack spreads and weak demand.
Global oil oversupply and weak crude fundamentals were the main drivers behind the price declines.
Geopolitical concerns provided only short-term support, mainly for IFO 380, and did not change the overall bearish trend.
News & Commentaries
MR freight is likely to hold firm with mild upward bias, rather than extend another sharp rally.
MR Market Outlook – Next 5–7 Days
Base case: Range-bound but supported.
MR freight is likely to hold firm with mild upward bias, rather than extend another sharp rally. The recent gains (3–10% WoW across key Asia-Pacific MR routes) have already priced in tighter prompt tonnage and active regional demand. Unless there is a fresh cargo push, rates may consolidate around current levels, with day-to-day volatility rather than a straight-line move higher.
MR tanker freight firmed across Asia-Pacific for the past week, with Platts last week assessments showing solid week-on-week gains on core MR routes such as Spore/Oz, SK/Oz and India/Japan, despite some marginal day-to-day softness. The strength reflects tighter prompt tonnage, short-haul regional demand and seasonal refinery movements in North Asia and India, which continue to support clean product flows. At the macro level, oil prices remain under pressure from ample global supply and inventory builds heading into 2026, but lower outright prices have helped sustain product trading activity and regional arbitrage, partially decoupling MR freight from crude price weakness.
(Source: https://en.macromicro.me/charts/946/world-baltic-dirty-clean-tanker-index)
Geopolitically, elevated risk premiums are underpinning freight sentiment, particularly across politically sensitive basins. Ongoing tensions in the Middle East, sanctions enforcement and disruptions around Venezuela continue to constrain effective vessel supply and inject volatility into tanker deployment decisions. While global demand growth remains modest and inventories comfortable, these micro-level disruptions, combined with active intra-Asia trading and limited MR availability, are keeping freight levels supported in the near term. Overall, the MR market is expected to remain range-bound but firm, with volatility driven more by regional supply-demand imbalances and geopolitical developments than by outright oil prices.
Exports have stabilised while freight has become more range-bound, highlighting that current shipping markets are being shaped as much by regional imbalances and geopolitical risk as by pure trade volumes.
Small Tankers Overview
The Southeast Asia and Far East markets present a mixed but generally balanced picture this week. Intra-SEA activity remains driven by CPP COA volumes, with persistent congestion—particularly at Singapore, Pengerang and Jakarta—creating demand for prompt replacement tonnage, especially for 100kb vessels, while chemical and palm spot activity stays subdued. Northbound sentiment remains soft, with January largely covered and attention shifting to February, as owners struggle to fill remaining space and prioritize firmer short-haul intra-SEA employment. In the Far East, winter conditions and weather disruptions have tightened availability on selected routes, supporting firm freight, although activity is expected to slow approaching Lunar New Year. Southbound trade is led by MTBE and caustic soda, with owners increasingly relying on part-cargo employment, while westbound flows remain thin and increasingly skewed toward ARA rather than regional destinations. Overall, freight levels are holding at last-done, but with vessel supply outweighing cargo availability, downside pressure—particularly on smaller parcels—may emerge if demand does not improve
Bunker Recent Trend and Forecast for Early 2026:
A widening of the price spread typically makes it more lucrative for traders to send more fuel oil to Asia. (Source : Reuters)