Middle Eastern fuel oil exports are set to rebound to a four-month high in June, rising more than 20% from May, as Iraq and Saudi Arabia reroute supplies through alternative ports while shipments through the Strait of Hormuz gradually resume following the US-Iran interim peace agreement, according to Reuters, citing trade sources and shipping data.
Exports Surge 20% Month-on-Month
Exports from the region are expected to reach about 2.4 million metric tonnes (508,000 barrels per day) this month, more than 20% higher than in May, according to Kpler and LSEG data cited by Reuters. However, shipments remain well below the pre-conflict monthly average of 5.5–6 million tonnes. The following table compares the volumes:
| Period | Monthly Exports (million tonnes) |
|---|---|
| Pre-conflict average | 5.5–6.0 |
| May 2026 | ~2.0 |
| June 2026 (estimated) | 2.4 |
Alternative Routes Fuel Recovery
The recovery follows the US-Iran interim agreement aimed at ending hostilities, easing concerns over disruptions in one of the world's busiest energy shipping routes. According to Palash Jain, Middle East oil consultant at FGE NexantECA, "Fuel oil flows through the Strait of Hormuz are expected to increase over the next 60 days, but the recovery is unlikely to be substantial. Uncertainty over the outcome of negotiations and the durability of the peace deal is expected to keep shippers cautious."
Shipping data from LSEG showed the Aframax tanker Gamsunoro, carrying around 80,000 tonnes of fuel oil loaded in Iraq, exited the Strait of Hormuz late on Wednesday and headed towards Fujairah. Exports could increase further as more cargoes gradually move through Hormuz over the coming weeks, Reuters reported. However, analysts said tighter regional fuel balances, limited scope for higher refinery runs and peak summer demand could restrict a sharper recovery.
Iraq and Saudi Arabia have been key in diversifying export routes. Iraq exported fuel oil from Syria's Baniyas port for the first time in March, with volumes reaching a record more than 600,000 tonnes in June. "Iraq remains focused on diversifying export routes, with the Syrian corridor serving as a strategic alternative to Hormuz," Jain said. Before the conflict, Iraq exported most of its fuel oil through Khor al-Zubair. The alternative route has seen millions of barrels transported by road across Syria to Baniyas before being re-exported.
Saudi Arabia is also expected to export more than 300,000 tonnes of fuel oil from its Red Sea port of Yanbu in June, the highest level in five months after diverting shipments away from the Gulf route. Oman's fuel oil exports are projected to reach nearly 300,000 tonnes, the highest level in more than two years.
Price Impact and Demand Outlook
The development has also sent high-sulphur fuel oil (HSFO) prices lower at major trading hubs such as Singapore, according to the report. HSFO is widely used as marine fuel, electricity generation fuel and refinery feedstock.
Despite the interim US sanctions waiver, traders told Reuters they expect Iranian fuel oil exports to remain capped as banking and payment-related hurdles continue to impede trade. The sources said financial settlement issues are likely to remain a key constraint even as diplomatic efforts continue to ease tensions in the region.
Shipping data showed Syria, Saudi Arabia and Oman emerged as the largest Middle Eastern HSFO exporters in June. Before the conflict, the leading exporters were Iraq, Kuwait, Iran and the United Arab Emirates.
The outlook hinges on the durability of the US-Iran peace deal and the pace of Hormuz traffic normalisation. With peak summer demand for power generation and limited refinery capacity, the recovery in exports is expected to be gradual.
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