The US tariffs have made any position feel like a gamble currently, but we remain largely bearish on global middle distillate pricing

Commentary summary:

• Middle East middle distillate exports point West, especially once Suez routing is considered

• Global middle distillate spreads and cracks decline over the previous week apart from HO spreads (US tariff effect)

• Tuesday March 4th witnessed the imposition of US tariffs against Canada and Mexico and an increase of existing ones on China. Will tariffs on Europe follow shortly?

• An increasing number of vessels have started to transit the Suez again. (Important to monitor the faltering ceasefire in the Middle East)

• Tariffs and their effect have made position taking feel like a gamble, but we remain largely bearish middle distillates from here

Singapore’s diesel markets continued to face downward pressure over the past week, with spreads and cracks extending their decline.

However, a floor has been found over the last few days, supported by an increasing flow of Middle Eastern diesel heading West and potential market adjustments following the introduction of US tariffs on 4th March.

James Noel-Beswick is Commodity Owner for Sparta. Before joining Sparta, James worked as an analyst for likes of BP and Shell and leads our continued development of the distillate product vertical.