Executive Summary: Markets Enter 2026 with Price Declines
On the first trading day of 2026 (January 2), oil products markets in Asia and the Persian Gulf faced a softer, rangebound environment. Market activity was sluggish due to continued New Year holidays in some regions. Most products, from gasoline to naphtha and gasoil, saw price decreases, while physical trading volumes in December 2024 had surged significantly in some segments like Singapore gasoline. The forecasted rise in Chinese gasoline exports for January and increased gasoil exports from India are key highlights of this report. Important methodology changes by Platts, including amendments to the Murban crude oil assessment, also took effect today.
📖 Introduction: Report Objective
This report analyzes data from the January 2, 2026, issue of the Platts Asia-Pacific/Persian Gulf Marketscan (part of S&P Global) to review price trends and key developments in the oil products markets of the two strategic regions: Asia and the Gulf. The goal is to provide a simple and practical analysis of the current market situation, identify trends, and forecast factors influencing the near future.
🔍 Methodology: How Was the Data Collected?
Source: All price data, news, and analysis in this report are extracted from the January 2, 2026, issue of the specialized Platts Marketscan publication.
Price Assessment: The quoted prices are primarily based on Platts' "Market on Close" (MOC) assessment process. In this process, prices are determined based on actual trades, bids, and offers within a specific time window.
Units: Prices for light and middle distillates like gasoline and naphtha are mainly reported in US Dollars per barrel ($/bbl), while heavy products like Fuel Oil are reported in US Dollars per metric ton ($/mt).
📊 Macro Market Analysis: Overall Softer Tone
The market entered the first day of the year in a softer mood with limited activity. The main reason cited is the gradual return of traders to their desks following the New Year holidays. This led to a broad decline in prices for most products compared to the final days of 2025.
📈 Key Product Analysis
1. Gasoline Market
Price Trend: Singapore gasoline prices were lower. For example, 92 RON gasoline fell by approximately $0.18 per barrel.
Key Point: The volume of physical gasoline trades in Singapore's MOC process in December more than tripled (to 2.9 million barrels), indicating heavy activity at year-end.
Forecast: China's gasoline exports in January are expected to rise to around 500,000 metric tons (compared to about 200,000 mt in December). This increase in supply could exert downward pressure on prices in the coming weeks.
Key Term: Crack Spread: The price difference between a refined oil product (like gasoline) and crude oil. Its decline indicates reduced profitability for refining that product. The Singapore 92 RON gasoline crack spread edged lower on this day.
2. Naphtha Market
Price Trend: The naphtha market was also reported as soft. Singapore naphtha (FOB) price fell by about $0.60 per barrel.
Key Point: South Korea's LG Chem issued a tender seeking naphtha for delivery in the first half of March and April, indicating future demand.
Supply: The trading volume of naphtha delivered to Japan (CFR Japan) increased 12.5% month-on-month in December.
3. Gasoil/Diesel Market
Price Trend: The ultra-low sulfur gasoil (10 ppm) market was rangebound. Supply is expected to outweigh demand in the fresh February loading trade cycle.
Key Point: India's gasoil/diesel exports in the week ended December 28 rose 55% week-on-week to 627,000 metric tons. Key destinations were Egypt and Tanzania.
Trading: Gasoil trading volume in the Asia MOC remained nearly flat in December (1.45 million barrels).
4. Fuel Oil Market
Price Trend: The low sulfur fuel oil (0.5% for marine use) market had a weak forward market structure, and its cash differential slumped to its widest discount in seven weeks.
Inventories: Heavy distillate stocks at the UAE's Fujairah port fell 6% to their lowest level in eight weeks. However, these stocks have increased 32% year-on-year since the end of 2024.
Key Term: Cash Differential: The premium or discount at which a specific cargo trades relative to a benchmark price (like MOPS). A negative number indicates trading at a discount.
5. Crude Oil Market
Price Trend: Medium sour crude prices were under pressure. The Platts cash Dubai benchmark flipped into a discount for the first time in two years.
Reason: The approaching spring refinery turnaround season and a lack of firm buying interest weighed on prices.
Major Methodology Change: Effective today, the methodology for assessing Murban crude oil has been fundamentally changed. It no longer has a floor price relative to Dubai and can trade freely above or below Dubai. Also, the "Murban Quality Premium" has been renamed to "Murban Quality Adjustment" with a revised calculation formula. This change aims to more accurately reflect sweet/sour market dynamics.
📉 Technical Analysis & Supporting Data
MOC Trading Activity - December 2024:
92 RON Gasoline: 2.1 million barrels traded. QQ was the largest buyer and Trafigura the largest seller.
10 ppm Gasoil: 1.45 million barrels traded. Shell was the largest buyer and TotalEnergies the largest seller.
0.5%S Marine Fuel: Trading volume reached 188,000 mt, the highest since August 2025.
Naphtha (CFR Japan): 225,000 mt traded. Vitol was the largest seller.
Fujairah Product Stocks (December 29):
Light Distillates: 6.66 million barrels (down 812,000 barrels)
Middle Distillates: 2.12 million barrels (down 185,000 barrels)
Heavy Distillates & Residues: 9.91 million barrels (down 636,000 barrels)
💎 Conclusion & Outlook
The market is entering the new year cautiously with a broad price decline. Although December trading was brisk in some segments, expected increased supply from China and India for products like gasoline and gasoil could be a bearish factor in the short term. The upcoming spring refinery maintenance season also presents a cautionary note for crude oil demand.
Platts' methodology changes, particularly for Murban crude assessment, indicate an effort to align with evolving market realities (such as relative tightness of sour crude) and market participants should closely monitor their implications.
🎯 Practical Recommendations for Stakeholders
For Buyers (Refiners, Importers): The current environment may present purchasing opportunities at lower price levels for some products. Close monitoring of increased exports from China and India is key.
For Sellers (Exporters, Traders): Given the forecast for increased supply, optimizing the timing and pricing of sales becomes more critical. Diversifying export destinations can mitigate risk.
For Analysts & Strategists: Incorporate the changes to the Murban assessment methodology into pricing models and spread analyses. This change could influence future behavior in the regional crude oil market.
Watch for the Coming Weeks: The actual level of China's January gasoline exports and the sustainability of India's gasoil export trend will be two determining factors for regional Asia price trends in the coming weeks.
Appendix: Explanation of Key Terms
FOB (Free On Board): Price includes cost of loading goods onto the vessel. Responsibility and cost of transport from the port of origin onward falls on the buyer.
CFR/CIF (Cost and Freight / Cost, Insurance, and Freight): Price includes cost of goods and transport (and often insurance) to the destination port.
MOPS (Mean of Platts Singapore): A daily benchmark price for oil products loading in Singapore.
MOPAG (Mean of Platts Persian Gulf): A daily benchmark price for oil products loading in the Gulf.
Backwardation: A market condition where prices for future delivery (e.g., one month ahead) are lower than the spot price (immediate delivery). Typically indicates a current shortage.
Contango: A market condition where prices for future delivery are higher than the spot price. Typically indicates a current surplus or carrying costs.
Time Spread: The price difference between two different delivery months in the swaps (futures) market.
