Around 510,000 mt of East of Suez ULSD is set to arrive in Europe in March, including around 220,000 mt sent in the seven days to March 26, according to cFlow, S&P Global Platts trade flow software.

Of the 510,000 mt set to arrive in March, 310,000 mt is headed for Northwest Europe and 200,000 mt to the Mediterranean.

However, the arrival of one 60,000 mt ULSD cargo in the Mediterranean could be delayed to April due to the blockage in the Suez Canal by a container ship, which ran aground March 23 and is not expected to be moved until the night of March 27 at the earliest.

Refined product shipments through the canal are expected to be delayed by up to a week, shipping sources in Singapore and North Asia said.

The LR1 Alsoorii was originally scheduled to arrive at its destination in Lebanon on March 26, but remains stuck in a queue of ships waiting to transit the Suez Canal northbound, cFlow data showed.

New shipments in the week to March 26 included LR2 tankers Four Sky and Sea Legend, both carrying around 110,000 mt of ULSD from Saudi Arabia to Antwerp, set to arrive March 30 and March 31, respectively.

Arrivals in the week to March 26 included the LR2 STI Jermyn, which brought around 90,000 mt of ULSD to Mohammedia, Morocco. The LR2 Seaodyssey was set to bring around 110,000 mt to Northwest Europe, but was re-routed towards South America when offshore Portugal.

European ULSD traders became increasingly bearish in the week to March 26, as the market remains well supplied while demand is sluggish due to coronavirus mobility restrictions. Thin incoming arbitrage volumes were key to keeping the market supported, albeit weak, they said.

“Right now, the market is only there due to the lack of arb cargoes. If they were there too, the market would be in real trouble,” one trader said, referring to both arbitrage from both the East and US Gulf Coast.

While the East/West arbitrage remains closed on paper, players in the East “will make it work,” a second trader said, referring to the uptick in East-origin arrivals in March.

"Even the sentiment that more diesel is coming is getting the market into panic mode," he said.

In February, around 490,000 mt of ULSD arrived in Europe from East of Suez. April arrivals are currently set at around 110,000 mt, cFlow data showed.