Singapore kero spreads blow through 10-year highs largely on China export-ban rumour; regrade flips positive out to Cal 28 and the Asian jet arbs into Europe slam shut
Oct/Nov Singapore kerosene spreads are up over $5/bbl on the week, more than $4/bbl of it in the last 24 hours, with October cracks following sharply. The spread has blown past its seasonal maximums of at least the last 10 years, and the regrade has flipped positive down the entire curve out to at least Cal 28, from -$5.32/bbl on 24 September when it had only just found a floor.
The trigger is a rumoured Chinese fuel export ban for October, and the narrative has turned fast: a week ago Chinese refiners were offering prompter 1H October cargoes and the whisper was unchanged volumes, with June Goh’s Monday note on October gasoline exports rumoured 200 kt lower the first crack. Today’s move prices the full reversal.
The arb consequences are immediate: South Korean and Singapore LR2 jet arbs have closed into Europe and Singapore MR jet arbs into the USWC. Three weeks ago every Asian jet arb into Europe was wide open; that picture has fully reversed.
Last call status: reinforced, from today’s distillate deep dive. This morning’s distillate deep dive turned bullish jet pricing in Europe and the USWC. There was perhaps a short-term bearish case for European jet resting on the open Asian arbs at the start of the week; those have now mostly shut, so the bearish leg has gone. Europe’s relief is thin: Dangote told the UN General Assembly this week that Nigeria now supplies most of Europe’s jet.
What invalidates this. The trigger is a rumour and the opposite rumour ran a week ago. Chinese refiners resuming October offers, or Beijing confirming unchanged quotas, would hand back much of this move and reopen the arbs. Demand is the softer counterweight: Ryanair has trimmed winter flights and Northeast Asian jet premia retreated as South Korean refiners kept offering. Against that, Trump rejecting Iran’s seven-day ceasefire keeps Hormuz shut and the macro supportive.
(Los Angeles: Jet)
(Rotterdam: Jet)
(October’s Singapore regrade)
(October’s Singapore kerosene spread and crack)
About the Author
James Noel-Beswick | Head of Commodities, Sparta Commodities
James is Head of Commodities at Sparta, leading the distillates vertical and covering the full oil barrel. He held analyst roles at BP and Shell before joining Sparta, and his market commentary is regularly cited by Reuters, Bloomberg, Financial Times, New York Times, the Wall Street Journal, and BBC News.
Connect: LinkedIn
About Sparta
Sparta is the AI leader for commodity trading, home to Leonidas AI, the first decision-making engine for oil and commodity traders. Backed by USD 42 million in Series B funding led by One Peak, with participation from returning investors FirstMark and Singular, the same investors behind AI leaders like Legora, Dataiku, and Synthesia. From independents to multinationals, the world’s leading commodity teams use Sparta and Leonidas AI to move faster, trade smarter, and stay ahead of the market.
For more information, visit Sparta or follow us on LinkedIn.
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