Malta-based global commodity trading house Alkagesta has shared new market insight examining the dual supply crisis gripping global energy markets, as diplomatic efforts to reopen the Strait of Hormuz stall and Rhine water levels fall to record lows. The company describes the situation as a state of emergency for European inland fuel distribution, according to coverage published by Manifold Times.
In an article published on Alkagesta Market Insights on 11 August, the trading and market intelligence teams set out how two simultaneous logistical crises are converging on prompt availability across Singapore, Northwest Europe and the Mediterranean. The analysis follows the company's earlier assessment of the Hormuz blockade and its fuel oil market implications.
Strait of Hormuz transits fell to a near one-month low of 13 ships on 9 August following an attack on an ADNOC-linked tanker, with both the United States and Iran demanding war reparations before any reopening agreement can be reached. At the same time, Rhine water levels at the Kaub chokepoint fell to 16 cm on 10 August, the lowest since records began in 1880, with forecasts pointing to a further drop to 4 cm by 14 August, effectively halting barge traffic and trapping fuel oil stocks at the ARA hub.
The supply picture across both key hubs has deteriorated sharply. In Singapore, Middle Eastern fuel oil imports nearly tripled week on week to 328,878 mt by 29 July, the highest volume since March, while onshore commercial heavy distillate stocks rose to a five-week high of 19.58 million barrels by 5 August. July bunker fuel sales are nonetheless estimated to have fallen 3.7% month on month to 4.44 million mt, with elevated premiums redirecting prompt demand towards alternative ports including Zhoushan and Port Klang.
In Europe, the VLSFO market remains acutely undersupplied as refiners continue to prioritise high-margin diesel over low-sulphur blending components. The Rhine crisis has forced barges to operate at just 15 to 20% of normal capacity, with freight rates from Rotterdam to Karlsruhe rising more than 400% in two months.
Alkagesta's strategic outlook points to a potential total breakdown in Rhine-linked inland distribution by mid-August, a VLSFO Hi-5 spread likely to remain above $200/mt through the third quarter, and a global crude market that analysts warn requires an additional 2.1 million b/d for 18 months to rebuild depleted inventories.
The full market insight is available on the company website: Fuel Oil Market Outlook — August 2026: choke point pressures.
