Alkagesta's latest fuel oil market commentary puts choke points at the centre of the price picture, arguing that transit risk rather than headline supply is doing most of the work in current differentials.
The Strait of Hormuz remains the sharpest of those risks. Roughly a fifth of global oil trade passes through the waterway, and even short-lived disruption feeds directly into freight, insurance and the premium buyers pay for prompt barrels east of Suez.
The Rhine is the quieter constraint. Low water levels restrict barge loadings between the ARA hub and inland German consumers, forcing partial cargoes and raising the effective delivered cost of fuel oil and gasoil in a market that has few alternative routes at scale.
The combination pushes value toward flexibility. Traders holding storage, blending capacity or shallow-draught barge capacity can capture spreads that a purely paper position cannot, which is why physical desks have been reluctant to let go of tank in ARA.
The commentary expects the pattern to persist while the risk premium and seasonal water levels stay unresolved.
