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Refined Products, Fuel Oil, Diesel-Gasoil
June 30, 2025
By Jan Kedzior
HIGHLIGHTS
End-users increase gasoil purchases as prices rise after Israel-Iran conflict
French consumers prefer heating oil despite legislative changes
MOC shows strong demand for French gasoil, tightening fundamentals
Gasoil activity in Northwestern Europe increased in recent weeks, with French consumers boosting purchases despite the summer season. Prices rose due to the conflict in the Middle East, and fears of further increases prompted consumers in eastern France to buy at any cost. After the conflict eased following a ceasefire, demand remained strong, with Platts Market on Close data showing sustained buying interest for French gasoil into Le Havre in the week ended June 27.
Gasoil, also known as heating oil, is typically associated with winter heating. However, consumers monitor prices year-round, seeking opportunities to buy in advance and store the product for winter use.
Because gasoil buyers focus on long-term needs, they are highly sensitive to short-term price fluctuations. When prices rise, heating oil users often reduce purchases, waiting for prices to drop.
The situation shifted when oil prices surged following Israel's attack on Iran on June 13. Prices had been relatively low before the conflict, as economic tariffs imposed by US President Donald Trump had pressured oil prices downward. Many gasoil consumers had been monitoring the flat price, waiting to make purchases.
When the conflict erupted and prices climbed, end-users rushed to buy, fearing further increases.
One source confirmed, "Consumers were buying heating oil irrespective of the price; it was a very volatile time for the gasoil market."
The outright price for 0.1% FOB ARA barge gasoil rose from $632.75/mt on June 12 to $786/mt on June 19, but it then fell after a ceasefire was agreed and was last assessed at $661.75/mt on June 27.
France is the only country in Northwestern Europe where consumers use 0.1% gasoil for heating. In January 2027, the country will move to a 50 ppm sulfur limit.
But despite the government's efforts to decrease the reliance on oil for heating, many consumers prefer to use gasoil.
"Heating oil is often less expensive than gas or electricity, and you are not reliant on the power grid. You store the product in a tank by your home, and you choose when to restock," the source said.
In addition, the Platts MOC assessment process has seen bids for French heating oil in four of the last five MOC pricing sessions. The buyer asked for a product with a flash point of at least 60 degrees to be delivered to Le Havre in July.
With heating oil volumes shrinking, terminals commonly ask for a flash point of 60 degrees, which allows gasoil to be stored with marine gasoil 0.1% (DMA), which also has flash 60.
Increased demand for 0.1% gasoil into France pushed 0.1% CIF NWE cargo differentials higher, narrowing the spread with Northwest European 10ppm diesel cargoes.
The premium paid for ULSD NWE cargo over its 0.1%S counterpart fell from $17.50/mt on June 19 to $5/mt June 27, reflecting tighter fundamentals for French-quality heating oil.
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