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Asia LSFO east-west spread rises on Suez Canal closure

  • Market: Oil products
  • 26/03/21

The east-west spread for Asian 0.5pc sulphur marine fuel continued to strengthen today on the prospect of a prolonged closure of the Suez Canal.

The east-west spread, or the difference between 0.5pc sulphur marine fuel prices in Asia and Europe, is rising sharply — with Asia prices extending their premium to those in Europe — because of potential delays to eastbound supplies.

The April east-west 0.5pc sulphur swap contract traded at about $22/t around 8:30am GMT today, up from $19-20/t at the same time yesterday.

Prompt prices also strengthened against forward months. April was assessed at a $1.25/t premium to May today, up from a $0.25/t premium yesterday and the highest since $1.50/t on 15 March. Asian 0.5pc marine fuel margins increased to $10.86/bl today, adding to gains in the past two sessions after having fallen to over a two-month low.

The April-May 380cst high-sulphur fuel oil (HSFO) spread also rose to $2.50/t in backwardation today from $1.75/t yesterday, the highest since $2.75/t on 22 March.

An estimated 400,000-600,000t of fuel oil that was scheduled to transit the Suez Canal in the next week heading east has been affected by the closure of the waterway. Actual volumes are difficult to assess as the duration of delay remains unclear and vessels may choose to change course, market participants said. Some of the supplies will head to Singapore.

It may take days to weeks to resolve the blockage of the Suez Canal, which has been closed since a large container ship ran aground on 23 March, salvage firm Royal Boskalis Westminster said yesterday. Japanese shipping firm Shoei Kisen, which owns the grounded ship, said today it has set a target to free the vessel by tomorrow.

The Suez Canal's closure will affect fuel oil volumes heading from west of Suez and the Middle East to Singapore, traders said. This includes supplies from Russia, which has accounted for 13pc of Singapore's total fuel oil imports since January 2017, second only to Malaysia, according to customs data. Supplies from Iraq and the UAE, which will also be affected by the closure of canal, made up 8.8pc and 6.3pc of Singapore's imports respectively.

By Sarah Giam

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18/12/25

Viewpoint: Japan's hybrid EV use keeps gasoline in mix

Viewpoint: Japan's hybrid EV use keeps gasoline in mix

Tokyo, 18 December (Argus) — Japan's gasoline consumption will continue falling because of its decarbonisation drive, but the country's gasoline consumption is unlikely to reach zero as gasoline-powered cars and hybrid gasoline-electric vehicles (HEVs) account for a vast majority of newly registered passenger cars. Japan's gasoline sales declined at least over 2016-24, with the exception of a slight year-on-year increase of 0.03pc in 2022, data from the Petroleum Association of Japan (PAJ) show. The country's gasoline sales totalled 330mn bl (904,100 b/d) in 2016, falling to below 280mn bl (767,100 b/d) in 2024. The country's transport sector accounted for 19.2pc of total CO2 emissions in the April 2023-March 2024 fiscal year, according to Japan's environment ministry. Half of the transport sector's CO2 emissions came from gasoline in the 2023-24 fiscal year. Tokyo renewed its global warming countermeasures plan in February 2025, which reiterated its target of having all new car sales be "electrified vehicles" by 2035 and to achieve net-zero CO2 emissions through the vehicle lifecycle by 2050, in efforts to abate emissions. But these "electrified vehicles" do not only refer to fully electric-powered EVs nor fuel cell vehicles (FCVs) but also include gasoline-consuming HEVs and plug-in hybrid electric vehicles (PHEVs). This means that Japanese passenger car owners will likely remain dependent on gasoline, even as gasoline consumption declines, given that Japan's preference for hybrids is likely to sustain its momentum for the foreseeable future. The country's gasoline requirement will fall by 2.4pc to 260mn bl (712,300 b/d) in the April 2026-March 2027 fiscal year, compared with the 2025-26 level, based on Japan's trade and industry ministry Meti's outlook. This downtrend is expected to continue by declines of 2.1-2.5 pc/yr at least until 2029-30, largely because of higher fuel efficiency and wider use of HEVs, Meti said. The number of newly registered passenger cars, including imported cars, totalled slightly below 2.4mn units over January-November 2025, data from the Japan Automobile Dealers Association (JADA) show. Out of this total, gasoline-consuming HEVs accounted for 60pc, and gasoline cars hold a 32pc share. Gasoline-powered cars and HEVs have jointly accounted for around 90pc at least since 2020. The share of HEVs in newly registered cars has also grown consistently every year, from 37.1pc in 2020 to 61.1pc in 2024, mostly replacing the share of gasoline cars, while the share of EVs has stalled at 0.6-1.7pc of the total of registered units every year over the same period, data from the JADA show. "The hybrid trend is likely to remain strong going forward. Compared with the time when it seemed the global shift to EVs would happen decisively and rapidly, the momentum now appears to have slowed somewhat," Japan's trade and industry minister Ryosei Akazawa said at an interview with reporters, including Argus , in October. The shift towards EVs has not been as strong as expected, which could have benefited gasoline car makers. But US tariffs on Japanese automobiles likely eroded the profitability of Japanese automakers, with 15pc of their domestic car output exported to the US in 2024, according to Meti. The US tariff rate was lowered to 15pc from 27.5pc in September, but is still far higher than 2.5pc, the rate before US president Donald Trump's additional 25pc automobile tariff took effect in April. To support Japanese automakers given the challenging tariff environment, Tokyo could freeze its environmental performance tax — a levy of 0-3pc — imposed on car owners at the point of acquisition depending on automobile features, such as fuel efficiency. This move could pave the way for gasoline-powered vehicles to regain momentum or pose obstacles to the expansion of EV cars' market share in the coming years. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US House clears hurdle to pass permitting bill

16/12/25
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16/12/25

US House clears hurdle to pass permitting bill

Washington, 16 December (Argus) — Republicans in the US House of Representatives have overcome an initial obstacle to passing a marquee permitting overhaul bill after committing to vote on key amendments that would strip out potential benefits for offshore wind. Republicans in the House voted 215-209 in a vote on Tuesday to approve a rule that will dictate the terms of debate for votes later this week on the SPEED Act, which has become the focus of bipartisan efforts to fast-track the permitting process for pipelines, electric transmission lines, railroads and other infrastructure. A group of far-right conservatives initially voted against the rule, but most reversed course during the vote in exchange for revisions that have yet to be made public. The Tuesday vote was one of the last remaining hurdles to House passage of the SPEED Act, which is expected to pick up some Democratic votes when it comes up for a final vote later this week. The House majority typically is responsible for putting up all the votes for a rule, meaning it would only take a few Republicans to block bill debate. Republicans were uncertain they would have enough votes for the rule, as far-right conservatives such as US representative Andy Harris (R-Maryland) and others were lobbying for changes. On Monday, US representative August Pfluger (R-Texas) urged attendees of a conference to put as "much effort as you possibly can" into persuading wavering Republicans to support the permitting bill. Pfluger is the chair of the Republican Study Commission, a caucus that represents a majority of House Republicans. "Go talk to them and let them know how important this is," Pfluger said during an event organized by the think tank the Conservative Coalition for Climate Solutions. Ahead of the vote, an industry coalition on Tuesday released a joint letter offering "strong support" for the bill. Among the signatories were the American Petroleum Institute, the US Chamber of Commerce, the Association of American Railroads and the US LNG Association. President Donald Trump has yet to take an explicit position on the SPEED Act, but administration officials are optimistic permitting legislation could be enacted. "I think we are at a time where the chance of a real permitting reform bill is higher maybe than it's ever been," US energy secretary Chris Wright said at the event on Monday. The SPEED Act would focus on the implementation of the National Environmental Policy Act (NEPA), a decades-old law that requires federal agencies to prepare environmental reviews of infrastructure projects. Pipeline companies and renewable energy developers alike blame the law for costly delays, both because of the time it takes for agencies to issue reviews and then the risks that permits will be thrown out because of lawsuits. The bill would narrow the scope of environmental reviews, aligning with a unanimous US Supreme Court ruling this summer. But the bill's most significant changes would make permits more durable. Even if a court found a NEPA review was flawed, the bill would keep permits intact during further analysis. And in a last-minute change, the bill would offer more permit "certainty" by limiting the government's ability to rescind prior approvals. That could protect pipeline permits such as the now-canceled Keystone XL pipeline, while also stopping Trump from halting more offshore wind projects. But the permit certainty language drew concern from far-right conservatives who oppose offshore wind. House Republicans in response agreed to vote on an amendment sponsored by Harris and others that would remove the "permit certainty" changes. Two other amendment votes also backed by Harris would stop expedited permitting treatment in the SPEED Act for offshore wind or any project that Trump has sought to block. Passage of those amendments could cost some Democratic support for the bill. Even if the bill passes, it is expected to be subject to major changes in the US Senate to attract enough support from Democrats to prevent a filibuster. Senate Democrats are hoping to insert language that would prevent what they describe as a "solar ban" being enforced by the Trump administration. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU eases ICE phase-out with 2035 CO2 car target: Update

16/12/25
News
16/12/25

EU eases ICE phase-out with 2035 CO2 car target: Update

Adds details on credits, transport commissioner comment in paragraphs 4-6 Brussels, 16 December (Argus) — The European Commission has proposed a new 90pc cut in car fleet emissions by 2035, replacing the previously agreed 100pc target that would have effectively phased out the sale of internal combustion engine (ICE) vehicles from that date The plan would allow some new ICE vehicles to remain on sale beyond 2035, alongside plug-in hybrids, range extenders and mild hybrids, as well as electric and hydrogen cars. The remaining 10pc of emissions would need to be offset through low-carbon steel, e-fuels or biofuels, according to the commission. The proposals need to be adopted by a majority in the European Parliament and among EU states. Automakers could also "bank and borrow" credits between 2030-32 to help meet the existing 2030 target of a 55pc cut from 2021 levels. Under the new proposals, manufacturers using these flexibilities would only need to achieve a 40pc fleet-average reduction, down from a previously planned 50pc. The commission indicated that credits for greenhouse gas (GHG) savings from e-fuels and biofuels can compensate up to 3pc of manufacturers' reference targets for 2035 and low-carbon steel credits can compensate for a further 7pc. Transport commissioner Apostolos Tzitzikostas said the credit system will boost uptake of sustainable fuels. "This is a clear signal than other technologies than battery electric vehicles (BEV) can be put on the market after 2035," said Tzitzikostas. Expanded carbon-neutral criteria would allow sustainable biofuels to help meet the targets that currently require 0g/km from 2035. EU renewable ethanol group ePure said emissions from ethanol were 79pc lower than fossil fuels in 2024, in line with previous years. The European Biodiesel Board reported savings of 77-81pc for biodiesel, using the official fossil fuel comparator of 94g of CO2e/MJ. German MEP Peter Liese criticised the original ICE ban, but said industry problems stem from market shifts, not from Brussels. "The industry must stop shifting the blame for its own mistakes and for market developments, for example in China, onto Brussels," he said, adding that he will push for green steel recognition before 2035. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU eases ICE phase-out with new 2035 CO2 car target

16/12/25
News
16/12/25

EU eases ICE phase-out with new 2035 CO2 car target

Brussels, 16 December (Argus) — The European Commission has proposed a new 90pc cut in car fleet emissions by 2035, replacing the previously agreed 100pc target that would have effectively phased out internal combustion engine (ICE) vehicles. The plan would allow some ICE vehicles to remain in use beyond 2035, alongside plug-in hybrids, range extenders and mild hybrids, as well as electric and hydrogen cars. The remaining 10pc of emissions would need to be offset through low-carbon steel, e-fuels or biofuels, according to the commission. The proposals need to be adopted by a majority in the European Parliament and among EU states. Automakers could also "bank and borrow" credits between 2030-32 to help meet the existing 2030 target of a 55pc cut from 2021 levels. Under the new proposals, manufacturers using these flexibilities would only need to achieve a 40pc fleet-average reduction, down from a previously planned 50pc. Expanded carbon-neutral criteria would allow sustainable biofuels to help meet the targets that currently require 0g/km from 2035. EU renewable ethanol group ePure said emissions from ethanol were 79pc lower than fossil fuels in 2024, in line with previous years. The European Biodiesel Board reported savings of 77-81pc for biodiesel, using the official fossil fuel comparator of 94g of CO2e/MJ. German MEP Peter Liese criticised the original ICE ban, but said industry problems stem from market shifts, not from Brussels. "The industry must stop shifting the blame for its own mistakes and for market developments, for example in China, onto Brussels," he said, adding that he will push for green steel recognition before 2035. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: European HVO prices unlikely to ease in 2026

16/12/25
News
16/12/25

Viewpoint: European HVO prices unlikely to ease in 2026

London, 16 December (Argus) — Northwest European hydrotreated vegetable oil (HVO) premiums have firmed on the year in 2025, setting the stage for continued strength as the market braces for higher blending targets in 2026. Premiums strengthen ahead of 2026 targets The Argus HVO Class II fob ARA premium to gasoil averaged $1,075/m³ during January-November, compared with $683/m³ in 2024. The premium firmed to $1,650/m³ on 21 October — a more than three-year high — driven by stronger demand from obligated parties rushing to meet RED targets before the end of the year. Increased consumption against relatively stable production has tightened supplies, and planned maintenance closures at European and Chinese facilities during the fourth quarter may continue to support values into early 2026. Germany's planned legislative changes in 2026 abolishing double-counting of Annex IX feedstocks could significantly boost HVO demand, as higher absolute volumes of biofuel will be needed to meet GHG reduction quotas, which then supports demand for drop-in fuels like HVO. The Netherlands is also planning an end to double counting and a switch to a greenhouse gas savings-based mandate, which could amplify demand in 2026. Trading activity reflects the bullish demand outlook — 888,000t of Class II futures traded on Ice in October, surpassing the previous record of 717,500t in June. Open interest now extends to December 2026, signalling confidence in sustained liquidity. Spot market activity has also picked up in 2025, with Argus Open Markets (AOM) volumes traded for HVO Class II reaching 122,000t in January to November 2025, surpassing the 2024 total of 44,000t. Producers tilt towards HVO over SAF EU sustainable aviation fuel (SAF) targets kicked in at 2pc this year and with this, producers are recalibrating output strategies. Definitive EU anti-dumping duties on Chinese biodiesel and HVO were imposed in February , and EU anti-dumping and anti-subsidy measures already apply to HVO and biodiesel originating from the US and Canada. The China duties do not apply to SAF, but US duties do. HVO and SAF are made from oils and fats via hydrotreatment, but HVO requires fewer processing steps, usually making it the cheaper grade. But HVO Class II has often maintained a premium over SAF throughout 2025 because of different market fundamentals. This encouraged European producers to maximise HVO output over SAF. But tight SAF supply towards year-end — driven by export restrictions from China — pushed SAF premiums above Class II, with the SAF premium over HVO averaging $292/t in November. In October, some additional Chinese producers secured SAF export licences, and with the SAF mandate remaining at 2pc in 2026, European producers are expected to favour HVO production while SAF imports from duty-free China and Singapore fill the gap. The UK Trade Remedies Authority said in late November that it plans to recommend that the government places countervailing duties on US-origin HVO from March. Imports of US HVO into the UK have already declined this year because of the ongoing investigation, and participants expect volumes to fall further. To meet mandates, the UK is expected to lean more heavily on used cooking oil-based biodiesel, while some blenders may also look to secure supply from Nordic producers. By-products soften The Argus bionaphtha fob ARA price averaged $1,541/t in January-November, compared with $1,675/t across 2024. Despite the decline, premiums have recently been supported by stronger HVO and SAF prices, with used cooking oil-based bionaphtha a viable drop-in blending alternative to meet mandates. Looking ahead, participants expect that firm HVO prices will sustain higher bionaphtha premiums in 2026, while voluntary demand, particularly from petrochemical manufacturing, could provide additional support to the market. The biopropane premium to its propane counterpart at the ARA hub fell during 2025, with third quarter levels hitting record lows since Argus began the assessment in October 2023. Argus biopropane fca ARA outright averaged around $1,408/t in January–November, down from $1,597/t in 2024. Although HVO and SAF output have boosted biopropane supply, demand remains constrained without mandated use. Looking ahead, premiums are expected to stay capped unless government incentives accelerate adoption . By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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