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Market Chatter: Mexico Fuel Oil Cargoes Head to Asia as Iran Conflict Disrupts Middle East Supply

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-- Asia received its first fuel oil cargo from Mexico in nine months on Thursday, with more shipments expected as higher regional prices attract supplies amid disruptions to Middle East exports caused by the Iran conflict, Reuters reported on Friday.

The arrivals are expected to ease concerns over tightening inventories in Singapore, Asia's main fuel oil trading and bunkering hub, after the conflict around Iran disrupted flows through the Strait of Hormuz and curtailed supplies from major Middle Eastern exporters, including Iraq and Kuwait.

The Suezmax tanker Orion, carrying about 160,000 metric tons, or about 1 million barrels, of Mexican high-sulphur fuel oil loaded from the Salina Cruz refinery on Mexico's Pacific coast, arrived in Singapore on May 7, Reuters reported, citing traders and ship-tracking data from Kpler.

PMI, the trading arm of Mexican state oil company Pemex, has also offered another 150,000-mt HSFO cargo for June delivery to Asia through a tender that closed on May 6, with bids valid until May 8, the news outlet said. PMI is expected to award the tender on Friday.

Fuel oil traders said strong Asian margins and excess supply in the Americas are encouraging cargoes to move eastward. Most of Mexico's fuel oil exports typically go to the US or Caribbean markets, Reuters said, citing Kpler data.

Pemex did not immediately respond torequest for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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