SINGAPORE: Asia’s spot fuel oil market softened further on Monday, while a price cap on Russian refined oil products kicked in over the weekend.

Price caps on Russian products took effect on Feb. 5, with the G7, the European Union and Australia agreeing on price limits of $100 per barrel on diesel and other products that trade at a premium to crude, and $45 per barrel for products that trade at a discount, such as fuel oil.

Russian fuel oil has been flooding eastward since the second quarter of 2022, as barrels sought new outlets following western sanctions. The influx of supplies has capped recovery in margins and cash differentials in Asia, especially for the high-sulphur fuel oil (HSFO) grades.

The 180-cst HSFO cash differential slumped to eight-month lows on Monday, hitting a discount of $4.89 a tonne to Singapore quotes.

The 380-cst HSFO cash differential fell to a premium of 95 cents a tonne, while the 0.5% very low sulphur fuel oil (VLSFO) cash differential was at $22.68 a tonne, retreating after hitting six-month highs at the start of February.