HSFO margin turns premium after more US sanctions on Iran oil

Singapore's high-sulphur fuel oil (HSFO) margin flipped into a premium in Asia Friday morning trade, market sources said, after the US Treasury slapped sanctions on a network that ships Iranian oil to China.

Margins for HSFO have received a boost amid tighter scrutiny on cargo movements from exporters Russia and Iran, while a tighter sour crude market also supported sentiment.

Singapore's 380-cst HSFO/Brent crack for March traded at a premium of 40 cents a barrel on Friday, according to market sources. HSFO cracks are typically discounted to Brent.

The crack was at its highest in more than five years, last seen at a premium in September 2019, data compiled by LSEG showed.

Some trade sources said the strength may not persist, pending further signs of clearer supply disruption, while weaker demand from China and broader uncertainty around global tariffs weighed.

(Reporting by Jeslyn Lerh; Editing by Clarence Fernandez)