One of world's richest countries turns to Russian fuel oil via Strait of Hormuz, FT says

Singapore, the world's biggest ship refuelling port, is replacing lost cargoes from the Middle East with Russian oil as the Iran war continues to destabilise global energy markets.

Source: Financial Times

Details: Imports of Russian fuel oil to Singapore have surged sharply since the start of the conflict. According to data group Vortexa, volumes in April have already exceeded the 2025 monthly average by more than two times.

The war and the blockade of the Strait of Hormuz have pushed global energy prices higher and caused shortages of key products, including jet and shipping fuel, known as bunker.

Oil prices, which influence the cost of marine fuel, have retreated from early April peaks, when Brent crude, the global oil benchmark, approached US$110 per barrel, but were trading at around US$106 on Thursday.

Under rules adopted by the G7 countries and the EU, Russian fuel oil is subject to sanctions and cannot be imported by those states. Meanwhile, trade remains permitted within the price cap framework, which allows companies to transport the fuel if it is purchased at no more than US$45 per barrel.

As part of a policy shift, the United States temporarily eased sanctions on Russian seaborne oil to curb rising prices.

Singapore itself has not imposed sanctions on specific Russian petroleum products, but traders must comply with the price cap if shipments involve Western maritime services.

Imports of fuel oil from the Middle East to Singapore fell significantly after the war began. However, according to Vortexa, supplies from Russia in March and April helped partially offset the decline from Gulf countries.

Supplies from Gulf states in March and April dropped to a combined 336,000 barrels per day, compared with 522,000 barrels per day in January and February. Russian cargoes over the same period increased from a combined 372,000 to 585,000 barrels per day.

For reference: The World Bank data shows that Singapore's GDP per capita reached US$90,674 in 2024. This indicator reflects the size and wealth of an economy per resident. By this measure, the country ranked fifth in the world.

For comparison, in 2024 the US recorded GDP per capita of US$84,534, Norway US$86,785 and Qatar US$76,688.

Background: Earlier, the Australian government received assurances from leading Asian fuel-exporting countries that supplies will continue as normal despite disruptions caused by the war in Iran.

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