Singapore's refineries are operating at less than half capacity, the lowest since the pandemic, as the Iran conflict disrupts Middle Eastern crude flows. Asian refining output fell to 70% of capacity in March-April from 82-84% in January-February, per Wood Mackenzie. This crunch has driven jet fuel prices to a five-year high, with exports plummeting 30% to 440,000 barrels/day.

Airlines in Australia and New Zealand face steep cost hikes as Singapore's reduced output strains regional fuel supplies.Eneos, a major Japanese refiner, warned that sustained high crude and freight costs could cripple profitability, while Phillips 66 highlighted risks from hedging strategies. Refineries are cutting production to avoid losses, with some turning to Russian crude under emergency measures. Petron Corporation cited "serious nationwide fuel shortages" as a risk if refineries fail to secure supply.

The crisis underscores vulnerabilities in global energy markets, with refined product prices remaining volatile despite high demand ahead of summer travel.