Iran 's fuel oil exports to East Asia this month will likely top 500,000 tons counting a fuel oil-laden supertanker that National Iranian Oil Company is due to ship to Singapore , traders said Thursday.

The very large crude carrier Nesa, from Iran's shipping fleet, is heading to Singapore with 300,000 tons of fuel oil aboard and is likely to land here in the middle of the month, said a trader familiar with the matter. The ship will likely carry 200,000 tons of 280-cst straight-run fuel oil from Bandar Mahshahr and 100,000 tons of cracked 380-cst HSFO from the Bandar Abbas.

It will be the second VLCC to arrive in the Singapore-Malaysia fuel oil hub this year, after NIOC shipped 280,000 tons of fuel oil on VLCC Hamoon in March, with that cargo likely having been bought by Vitol.

It isn't clear if the May cargo has already been sold. "We'll have to see the values; everyone will try to low-ball," the trader said.

Western sanctions against Iran 's nuclear program have driven away many of NIOC's usual fuel oil buyers forcing it to store the barrels in tankers and ship them to the Singapore market, the world's largest bunker port.

Besides Nesa, two more Aframax's have been booked--one each by Vitol and Tianbao--to pick up a total of 160,000 tons of fuel oil from Bandar Mahshahr in May, while a third is likely to be booked by Kuo Oil.

Tianbao is due to take the cargo to China , while Vitol's shipment is likely to land in Singapore .

Increased fuel oil exports from Iran are likely to undermine fundamentals in the East Asian market, with arbitrage inflows from the West set to jump to more than 4.50 million tons this month.

Besides the estimated 540,000 tons of fuel oil from Iran , at least four more fuel oil cargoes totalling about 330,000 tons, originating from the Middle East , have so far been booked to head to Singapore . Traders say an oversupplied Fujairah market will likely drive even more cargoes this way.
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