Mexican fuel oil heads to Asia, Europe in March on Trump tariffs

Mexican fuel oil cargoes are heading to Asia and Europe this month as higher prices draw supply, while traders eye more diversions after U.S. President Donald Trump imposed tariffs on imports this week, trade sources and analysts said.
State energy major Pemex typically sells most of its heavy crude and high-sulphur fuel oil (HSFO) for processing at U.S. Gulf Coast refineries but a 25% tariff on Mexican goods implemented by Washington on Tuesday is diverting cargoes.
Mexico's HSFO deliveries to Asia and Europe are set to climb in March, the first increase in at least five months, data from trade sources and shipping analytics firms Kpler and Vortexa show.
Two Mexican fuel oil cargoes totalling 145,000 metric tons, or 920,750 barrels, are expected to land in Singapore in late March, Kpler's data showed as of this week, while Europe is forecast to receive at least four shipments this month totalling 188,000 tons.
Strong HSFO prices in Asia have attracted Mexican supply, the trade sources said. Spot prices for benchmark Singapore 380-cst HSFO soared in recent sessions, while refiners' margins for producing the fuel reached rare premiums last month.
"Europe is a more natural outlet for Mexican fuel oil. But with current prompt strength in Singapore, maybe more (oil) can flow here," an Asia-based fuel oil trader said.
HSFO can be blended as marine fuel at bunker hubs such as Singapore and Rotterdam.
Neither Pemex nor its trading arm immediately responded to a request for comment.
"We may see diversions of fuel oil cargoes currently in transit to the U.S. East Coast, potentially increasing European arrivals from Mexico this month," said Vortexa analyst Xavier Tang, adding that the tariffs will likely displace a considerable proportion of U.S. HSFO imports from Mexico.
The next Mexican fuel oil cargo bound for U.S. is being shipped by the Panamax-sized tanker Constellation, which is due to discharge at Houston on Friday, Kpler data showed.
However, the volume to be diverted to Asia and Europe would depend on whether Washington adjusts or suspends its tariffs and on emissions tax in Europe, traders said.
If the U.S. import tariff remains at 25%, cargoes are likely to head east, another Asia-based fuel oil trader said.
A Europe-based trader said that traders will also consider the EU emissions trading system (ETS) tax when calculating the arbitrage to Rotterdam.
"ETS prices have been low but if prices rise it could become a bigger factor in arbitrage considerations," the trader added.
Given this, a source from PMI Comercio Internacional, Pemex's trading arm, said it will be easier to sell its HSFO to Asia than to Europe. The sources declined to be named as they are not authorised to speak to media.
(Reporting by Jeslyn Lerh in Singapore and Stefanie Eschenbacher in Mexico; Additional reporting by Enes Tunagur in London; Editing by Florence Tan and Christian Schmollinger)

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Gulf Today

12 minutes ago

• Gulf Today

Airlines disrupted by Middle East conflict

Global airlines have suspended or reduced flights in the Middle East as the conflict between Israel and Iran rages and the United States joins the fight. The US carried out strikes against Iranian nuclear sites overnight Saturday to Sunday after over a week of deadly missile exchanges between Israel and Iran. Here is the latest airline situation: European airlines British Airways cancelled flights between London's Heathrow Airport and Dubai and Doha on Sunday following the US strikes on Iran. But the airline said on Monday that it was "scheduled to operate as normal" on those routes. Air France halted flights to Saudi Arabia and the United Arab Emirates until at least Tuesday inclusive, the airline said. It also extended the suspension of the Paris-Tel Aviv route until July 14. Flights of Air France's low-cost carrier Transavia from Paris to Beirut have been suspended until June 30 while the Tel Aviv route is closed until September 7. Germany's Lufthansa group, whose other airlines include Swiss, Austrian and ITA, has suspended flights to the Middle East until June 30. The Amman and Erbil, Iraq, routes were also suspended until July 11. The group will not fly to Tel Aviv and Tehran will until July 31 and is also avoiding the air space of countries involved in the conflict. Greece's Aegean Airlines has stopped Tel Aviv flights until July 12. Its Amman, Beirut and Erbil routes are closed until June 28. Turkish airline Pegasus has scrapped flights to Iraq, Jordan and Lebanon until June 30, and Iran until July 30. No Turkish Airlines flights to Baghdad, Damascus and Tehran are available before July 1. Finnair meanwhile confirmed it was suspending flights to Doha. The carrier is also staying out of the airspace of Iran, Iraq, Syria and Israel. US and Canadian airlines United Airlines has warned passengers that flights to and from Dubai scheduled between June 18 and July 3 may be affected and is offering no-fee ticket changes under certain conditions due to Middle East unrest. The US airline has implemented the same flexibility for Tel Aviv flights between June 13 and August 1, allowing customers to rebook for other major European cities. Air Canada has temporarily suspended its daily non-stop service from Toronto to Dubai starting June 18 and warned the suspension could be extended. Travel via a European stopover on a partner airline remains possible, according to its website. American Airlines is allowing customers to change their bookings to Doha without fees for travel originally scheduled between June 19 and July 20. Asian airlines Singapore Airlines has cancelled eight flights to Dubai — two per day from Sunday through Wednesday. Agence France-Presse Status of flights are displayed on a screen at the Indira Gandhi International Airport in New Delhi on Monday. AFP

Al Etihad

an hour ago

• Al Etihad

FNC hosts meeting of GCC Legislative Councils, European Parliament President in Abu Dhabi

23 June 2025 20:21 ABU DHABI (WAM) The Federal National Council (FNC), chaired by Saqr Ghobash, Speaker of FNC and President of the 18th Regular Meeting of the Speakers of GCC Legislative Councils, hosted a high-level meeting on Monday with Roberta Metsola, President of the European gathering took place at Emirates Palace in Abu Dhabi, bringing together the heads of the Gulf Cooperation Council's legislative meeting was attended by Ahmed bin Salman Al-Musallam, Speaker of the Council of Representatives of the Kingdom of Bahrain; Sheikh Dr. Abdullah bin Mohammed bin Ibrahim Al Al-Sheikh, Speaker of the Shura Council of the Kingdom of Saudi Arabia; Khalid Hilal Al Maawali, Chairman of the Shura Council of the Sultanate of Oman; Yousef bin Ali Al-Khater, Chairman of the Internal and External Affairs Committee of the Shura Council of Qatar, and Jassim Mohammed Al Budaiwi, Secretary-General of the Gulf Cooperation Council (GCC).In his opening remarks, FNC Speaker stated that this meeting represents a milestone in the evolution of Gulf–European parliamentary relations. It reflects a shared understanding of the need to deepen institutional dialogue, broaden avenues for coordination, and solidify channels of consultation between parliamentary institutions, which now serve as key bridges of understanding between the peoples of the GCC and also emphasised that ties between the GCC states and Europe stretch across various historical phases and have taken multiple forms, rooted first in trade, maritime routes, and knowledge exchange, and now expanded into contemporary partnerships across the economic, security, political, cultural, and social spheres. These relations, he noted, are the fruit of mutual awareness and a genuine appreciation for each party's regional and international added that GCC–European relations took on greater clarity and depth with the establishment of the GCC, through which its member states have sought to strengthen relations with the European Union, recognising the EU as a major player in the international order and a source of advanced institutional experience. Conversely, Europe has come to recognise the Gulf region as a promoter of moderation in global politics and a key contributor to regional and international her part, Metsola expressed her gratitude to the UAE for the warm welcome, openness, and commitment shown in hosting this historic meeting.'We gather at a time when the security situation in the Middle East remains deeply concerning,' she stated. 'I commend your concrete commitments to peace and stability, both within the region and beyond. Your countries have hosted ceasefire negotiations in several conflicts, and we are partners in confronting terrorist attacks, combating maritime piracy, and choosing the path of diplomacy.''In this context,' she added, 'the partnership between the European Union and the GCC is not only essential but strategic.'Al Budaiwi delivered a speech in which he expressed his appreciation to President His Highness Sheikh Mohamed bin Zayed Al Nahyan, for his steadfast support for GCC unity and for hosting this important meeting. He also extended his gratitude to Saqr Ghobash for his initiative in convening the session, emphasising the significance of continued high-level visits and dialogue between the two sides.

Sharjah 24

2 hours ago

• Sharjah 24

Federal National Council holds special ‘UAE–EU' session

Warm welcome and opening remarks Saqr Ghobash opened the session with a welcome speech, greeting Roberta Metsola and her delegation. He also acknowledged key UAE officials including Minister of Justice Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Foreign Trade Dr. Thani bin Ahmed Al Zeyoudi, and other senior government representatives. Attendance of key stakeholders The session included EU ambassadors, European business leaders with UAE ventures, members of the Anwar Gargash Diplomatic Academy, Emirates Youth Councils, and the Children's Parliament, symbolising a broad spectrum of UAE–EU engagement. Emphasis on dialogue and shared values In his remarks, Ghobash highlighted the UAE's commitment to dialogue, human dignity, and tolerance. He praised the visit as a sign of mutual respect and a shared parliamentary vision rooted in common humanitarian values. Tribute to the UAE's founding vision Ghobash paid tribute to the UAE's Founding Father, Sheikh Zayed bin Sultan Al Nahyan, and current leadership for upholding the nation's principles of peace and cooperation. Strengthening parliamentary cooperation The FNC Speaker noted the significance of Metsola's visit in deepening parliamentary cooperation, setting the stage for joint action on global issues like sustainable development, peace, climate safety, and combating extremism. Humanitarian concerns and regional stability Ghobash voiced concern over the worsening situation in Gaza and stressed the importance of de-escalation, civilian protection, and a path to peace. He also expressed alarm at rising regional tensions, particularly concerning Iranian nuclear facilities, calling for diplomacy as the only solution. Metsola's remarks: A new era of UAE–EU partnership In her address, Roberta Metsola described the UAE–EU relationship as entering a renewed phase based on peace, prosperity, and openness. She praised the UAE's role in promoting coexistence and diplomacy, and highlighted its growing global stature. Economic and cultural ties strengthen cooperation Metsola noted that the EU is the UAE's second-largest trading partner, with €328 billion in mutual investments. She emphasized tourism, education, and culture as core areas for future collaboration. Vision for strategic future cooperation Concluding her remarks, Metsola expressed hope that this session would mark the start of deeper strategic cooperation. She affirmed that with strong political will and mutual trust, UAE–EU relations could flourish across multiple domains.