Alkagesta market insight on European choke point pressures picked up by Manifold Times

Malta-based global commodity trading house Alkagesta has been covered by bunkering trade publication Manifold Times after publishing a market update on what it describes as a dual supply crisis across global energy markets. The company points to a stalled diplomatic process around the reopening of the Strait of Hormuz alongside Rhine water levels at their lowest on record, a combination it says has created a state of emergency for European inland fuel distribution.

The update, published on 11 August on Alkagesta Market Insights, sets out how two simultaneous logistical constraints have tightened prompt fuel availability across Singapore, Northwest Europe and the Mediterranean. Transits through the Strait of Hormuz 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 seeking war reparations ahead of any reopening agreement. At the same time, Rhine water levels at the Kaub chokepoint dropped to 16 cm on 10 August, the lowest since records began in 1880, with forecasts at the time pointing to a further fall to 4 cm by 14 August that would effectively halt barge traffic and leave fuel oil stocks trapped at the ARA hub.

Supply picture across the main hubs

In Singapore, Middle Eastern fuel oil imports nearly tripled week on week to 328,878 mt by 29 July, the highest volume since March, offering some relief as 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 toward 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 constraint has forced barges to operate at 15–20% of normal capacity, and freight rates from Rotterdam to Karlsruhe rose more than 400% over two months.

Outlook set out by the trading house

Alkagesta's strategic outlook flags a potential breakdown in Rhine-linked inland distribution by mid-August, a VLSFO Hi-5 spread likely to hold 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 company's earlier assessment of the same corridor is set out in its July 2026 Hormuz blockade fuel oil outlook, while the full August note is available on the company's site as Fuel oil market outlook, August 2026: choke point pressures.

Alkagesta trades petroleum products, fertilizers, biofuels and steel across more than 48 countries.