SINGAPORE: Asia’s cash premiums for 0.5% very low-sulphur fuel oil (VLSFO) dipped on Tuesday, weighed down by muted trading activity in the physical market.

Cash differentials for Asia’s 0.5% VLSFO slipped to a premium of $24.60 a tonne to Singapore quotes. They were at a premium of $24.75 per barrel a day earlier, the highest since February 2020.

At the start of 2020, the International Maritime Organization banned ships from using fuels with sulphur content above 0.5%, compared with a limit of 3.5% earlier, unless they were equipped with sulphur-cleaning devices called “scrubbers”, making VLSFO a compliant fuel of choice.

The front-month VLSFO crack slipped to $24.19 per barrel against Dubai crude during Asian trade on Tuesday, down from $25.58 per barrel on Monday.

The 380-cst HSFO barge crack for April traded at a discount of $16.70 a barrel to Brent on Tuesday, compared with minus $16.83 a barrel on Monday.

Cash premiums for 380-cst high sulphur fuel oil (HSFO) rose to $7.18 per tonne to Singapore quotes, compared with $5.39 per tonne a day earlier.

The European Union’s foreign ministers disagreed on Monday on whether and how to slap sanctions on Russia’s lucrative energy sector over its invasion of Ukraine, with Germany saying the bloc was too dependent on Russian oil to decide an embargo.

Oil slipped below $114 a barrel on Tuesday, giving up some of the previous day’s 7% surge, as European Union members disagreed on a potential oil embargo on Russia, although persistent supply risks limited the decline.