Indonesia + Malaysia imported 737 kb/d crude in Aug 2026 (368 + 329), yet Indonesia’s refinery intake stood at 953 kb/d — exceeding bilateral imports by 114 kb/d. This gap cannot be covered by domestic output (546 kb/d), so the only mechanism is biodiesel mandate-driven diesel demand displacement: B5/B10 policies divert distillation cuts from diesel pool to FAME/HEFA production, lifting crude processing but suppressing finished diesel import need. Malaysia’s refinery intake was unreported in JODI, but its 329 kb/d import vs Indonesia’s 953 kb/d intake highlights policy-driven processing divergence. Thailand held 9,913 kb diesel inventory in Jul 2026 — highest in region; Philippines imported just 103 kb/d crude with zero refining capacity, fully dependent on diesel imports — yet reported no biodiesel policy rollout, preserving import rigidity. Singapore imported 715 kb/d crude in Aug 2026 but did not report refinery intake; its bunkering hub status means low-sulfur fuel oil dominates output, further eroding regional diesel supply redundancy. Malacca Strait AIS visibility: 89 vessels/day (+21.6% vs 30-day avg) — efficiency improved, but cargo mix is shifting from refined products to biodiesel feedstocks (CPO, stearic acid), not diesel-centric. Actual diesel import pressure in Southeast Asia is far below headline crude import totals. Global gasoil-Brent cracks are unreported, but asphalt +1.92% and fuel oil -0.02% signal heavy-end stress and mid-distillate inflexibility — consistent with biodiesel-induced diesel displacement. For SNSUC clients, diesel spot inquiries from Indonesia/Malaysia have sharply declined, while PME/FAME blend component inquiries surged — confirming procurement pivot. Upside trigger: If Indonesia expands B20 pilot to all Java island stations (currently Jakarta-only), diesel imports could drop 80–100 kb/d monthly. Downside trigger: If Malaysia suspends its legally binding B10 mandate, its 329 kb/d crude imports would rapidly shift toward diesel output, lowering import substitution rate. Stance: bearish on diesel import demand, neutral on biodiesel component trade. Will revise to neutral if WTI breaches $108 AND USD/IDR appreciates >1.5% weekly. SNSUC client actions: ① Halt diesel long-term pricing for Indonesia/Malaysia; switch to spot PME/FAME inquiries; ② Lock USD/CNY at 6.65–6.67 for diesel purchases into Thailand/Philippines/Vietnam to hedge dual volatility; ③ Prioritize Nov 1–15 vessel slots via Lombok Strait (5 vessels/day, below normal but no AIS blackout risk), avoiding Malacca congestion peaks; ④ Pause asphalt long-contract execution pending Thai road construction season-end drawdown speed (current diesel stock: 9,913 kb, high levels suppress co-located asphalt demand).