Asia's Diesel Shipments to Africa Surge as Middle East Supply Falters
Asia's diesel exports to Africa hit a 4.5-year high in August as Middle East shipments fell to a nine-year low amid shipping disruptions.
Asian diesel exports to Africa are on track to reach their highest level in at least four and a half years this August, according to ship tracking data and trade sources. The surge comes as African buyers pivot away from the Middle East, where persistent shipping risks have severely curtailed supply.
Shipments from Asia, including India, are estimated between 1.8 million and 2 million metric tons for the month. In contrast, Middle East diesel exports to Africa have plummeted to between 600,000 and 800,000 tons — the lowest in nearly nine years — due to ongoing threats in the Bab el-Mandeb strait and the Strait of Hormuz.
The disruption follows a series of events, including the U.S.-Iran conflict and attacks by Iran-aligned Houthi forces on Saudi Aramco's Jazan refinery. The Jazan facility's shipments to Africa fell to zero in August, down from 163,000 tons in July, according to Kpler data.
The shift is also driven by economics. The east-west price spread — the difference between front-month ICE gasoil and 10ppm sulphur gasoil swaps — widened to minus $135 per ton in August from minus $100 in July, making it profitable for Asian refiners to send cargoes westward.
Analysts note that as long as Saudi tankers avoid the Bab el-Mandeb route, East Africa will likely continue relying on Asian barrels. Improved refinery runs in Asia and a resumption of Chinese exports are expected to keep the arbitrage window open in the near term.
Asian refiners' diesel margins averaged $66 a barrel in August, up from $61 in July, encouraging higher output. Meanwhile, the benchmark Singapore diesel cash premium has cooled to a one-month low of about $4 a barrel, reflecting increased spot availability.