January 03, 2025 [Reuters]- Singapore’s jet fuel imports probably hit multi-year highs in December last year, with India being the top supplier as the arbitrage to Europe stayed shut, trade sources and shiptracking data show.

Jet fuel imports into the tiny city state are closely followed by markets, as it is a major trading and storage hub for refined fuel in Asia.

The strong supply to Singapore and expectations of higher exports from China after its refiners received last week their first batch of the 2025 export quota, could weigh on Asia’s spot jet fuel prices, added the sources, who all sought anonymity.

Singapore’s jet fuel imports were up to 2.55 million barrels in December, gaining from around 2 million barrels the previous month, estimates from LSEG, Kpler and trade sources showed, with most of the supply coming from India and South Korea.

India diverted its jet fuel and kerosene exports from Europe to the rest of Asia as the east-west arbitrage remained closed, FGE analyst Liu Xuanting said in a note.

The rise in supply has flipped the regrade to negative territory since mid-December, she added.

The regrade, a spread between prices of jet fuel and 10-ppm gasoil, averaged at discounts of 80 cents a barrel the past two weeks versus November’s average premium of 80 cents.

Indian refiners typically sell refined products via spot tenders to traders who either send these volumes to Asia or northwest Europe, depending on arbitrage opportunities.

India’s exports to Asia hit multi-year highs in November as it did not export any to northwest Europe.

Its December exports to northwest Europe were at around 1 million barrels, little changed from October’s two-year lows, LSEG and Kpler shiptracking data showed.

Some northeast Asia refiners also switched to selling jet fuel instead of diesel in the past two months, lured by better margins, one northeast Asia-based source said.

The East-West price spreads still indicate the East as a preferred destination for January-loading cargoes, two analysts said.

Some India-origin barrels will continue to arrive on Asian shores this month, as buying activity from northwest Europe will need some time to pick up and Asian prices have to weaken further for the arbitrage window to reopen, one of the Singapore-based trade sources said.

About 600,000 barrels of India’s jet fuel will be heading to southeast Asia and Australia in January, one shipbroking source said.

However, some traders expect jet fuel flows from the Middle East and India to northwest Europe to emerge soon, as inventories at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub have dropped near eight-month lows.

China-origin barrels will keep Asian markets fully supplied in these two months and swing suppliers may end up finding demand outlets west again, a third trade source said.

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