Fujairah Stocks Surge 9% as Gasoil Slips — Policy Volatility Lifts RINs and POGO

Distillate fundamentals weakened sharply mid-week as ICE gasoil fell again to $636/t, and the Fujairah Energy Data Committee reported a 9% surge in total oil-product stocks to 17.81 million bbl, led by a substantial build in middle distillates. The increase reflects continued gasoil weakness and subdued regional demand, with storage hubs now absorbing excess cargoes as cracks soften. The front-month heat crack remains near $32.9/bbl—well below summer highs—highlighting some margin compression even as jet and gasoline spreads stay firm.

Late Tuesday’s social-media post from Donald Trump added another layer of uncertainty to U.S. biofuel sentiment. His remarks suggesting the restriction of used-cooking-oil imports were interpreted as a response to China’s reduced soybean purchases, but in practice, the U.S. already removed imported UCO from 45Z and RFS eligibility earlier this year. The statement, therefore, served mainly to highlight the persistent policy confusion and lack of clear guidance from the administration, reinforcing the sense that market signals are being driven more by politics than by regulatory consistency.

In the United States, D4 RINs extended their rally to $1.07 for 2025 and $1.14 for Dec-26, marking the highest levels of the year as compliance anxiety deepens. The ten new Small Refinery Exemption (SRE) petitions filed since July 1 come after the EPA’s August 2025 cleanup of 175 legacy cases from 2016–24, confirming a new wave of hardship claims. With RINs now elevated, additional filings appear inevitable. Biodiesel screen margins remain deeply negative at –53 to –56 ¢/gal, while soybean crush margins have strengthened to $1.53/bu (≈ $56/t) on strong NOPA data showing 5.39 million tons of soybeans crushed and soyoil stocks at 564,000 tons, a nine-month low but still up 16.6% year-on-year.

Still, the NOPA crush data contrasts with the widening carry on the soybean-oil curve. The Dec–May spread moved out to –0.90 ¢/lb versus –0.86 for Dec–Jul, showing deepening contango despite robust processing volumes. This reflects the reality that the U.S. harvest is now more than 50% complete and logistical pressures are mounting. Low water levels on the Mississippi River are limiting barge movement and pressuring basis, while export sales for soybeans remain disappointing. As farmers struggle for storage space and defer selling through Thanksgiving, front-month spreads are likely to remain weak despite healthy domestic crush margins.

European biodiesel values mirrored the downturn in gasoil. RME traded at $1,388/t while UCOME held $1,474/t, keeping the UCOME/RME spread wide at +$86/t and RME/FAME 0 near +$74/t. HVO Class II eased slightly to $2,583/t but remains supported by ongoing waste-oil scarcity, while SAF held steady at $2,699/t. Forward POGO values hover around +$430/t, supported by firmer palm fundamentals and expectations of higher Indonesian export levies. Notably, January BOGO has now broken above +$500/t, reflecting distillate weakness rather than feedstock tightness.

In Asia, Jakarta’s plan to raise its crude-palm-oil export levy from 10% to 15% is under ministerial review, aimed at funding the transition from B40 to B50 biodiesel blending. The higher levy is expected to generate several hundred million dollars annually for BPDPKS while tightening export margins and supporting CPO futures, which last traded near 4,460 ringgit/t ($1,055/t). November offers were reported near $1,130/t FOB Indonesia against buying ideas closer to $1,112.50/t. The move underscores Indonesia’s continued reliance on fiscal tools to sustain biofuel expansion.

Meanwhile, Singapore has become the first country worldwide to legislate a green-aviation-fuel levy on all departing flights starting in 2026. The levy—estimated at US $3 to $16 per passenger—will finance the procurement of sustainable aviation fuel to reach a 1% blending target at Changi and Seletar Airports. By opting for a pay-as-you-fly mechanism rather than a blending mandate, Singapore reinforces Asia’s shift toward funding decarbonisation through levies rather than refinery mandates.

Altogether, the 9% Fujairah stock surge, falling gasoil prices, deepening soybean-oil contango, and levy-driven policy tightening in Asia illustrate a market caught between weak physical demand and strong political signals. ICE gasoil now tests critical support near $600/t, while POGO consolidates between +$400 and +$450/t. As refiners offload surplus middle distillates and forward BOGO breaches +$500 on weaker gasoil, still the biofuels complex remains dictated more by regulation and logistics than by pure fundamentals heading into year-end.