Diesel, jet fuel exports from northeast Asia to recover in May, sources say

• South Korean refiners sold more than 10 diesel cargoes for May (each ~300,000 barrels), over twice April's volume but still below the pre-conflict level of 25+ cargoes
• Refining margins hit record highs of ~$60/barrel this month; diesel margins stood at $62/barrel (down from $86 peak on March 30 but triple end-February levels)
• Cash premiums have declined significantly from peaks—diesel premiums fell from $10+ to below $5/barrel, and jet fuel premiums dropped from $40+ to ~$18/barrel, but remain more than double pre-war levels

Summary

Northeast Asian diesel and jet fuel exports are rebounding in May as refiners capitalize on record margins and improved crude supply following disruptions from an Iran conflict that began February 28.

Key Figures:

• South Korean refiners (SK Energy, GS Caltex, S-Oil, Hyundai Oilbank) sold over 10 diesel cargoes for May loading—more than double April's volume
• Taiwan's Formosa Petrochemical sold two diesel cargoes for May versus none in April
• Jet fuel sales reached at least 5 cargoes for May compared to approximately 3 in April
• Each cargo represents around 300,000 barrels
• May volumes remain below pre-conflict levels of 25+ cargoes

Market Impact:

Asian refining margins hit all-time highs of ~$60/barrel in April, with diesel margins peaking at $86/barrel on March 30 (currently $62, triple end-February levels). Jet fuel cracks reached $94/barrel on March 30, now at $69/barrel—still more than triple pre-war levels.

The export recovery has eased pricing pressure:

• Diesel spot premiums fell from $10+/barrel to under $5/barrel (FOB Korea basis)
• Jet fuel cash premiums declined from peaks above $40/barrel to approximately $18/barrel, though remaining double end-February levels

Supply Context:

The conflict disrupted oil supplies through the Strait of Hormuz, causing record spot premiums across Asia Pacific. While current premiums and margins have moderated from peaks, they remain significantly elevated, indicating ongoing supply constraints at refineries across Asia and the Middle East.