East of Suez Market Update 10 Aug

Most prices in East of Suez ports have increased, and availability of all fuel grades is tight in Zhoushan.

IMAGE: Aerial view of Zhoushan, Zhejiang, China. Getty Images

Changes on the day to 17.00 SGT (09.00 GMT) today from Friday:

• VLSFO prices up in Fujairah ($36/mt), Zhoushan ($13/mt) and Singapore ($12/mt)
• LSMGO prices up in Zhoushan ($22/mt), Singapore and Fujairah ($18/mt)
• HSFO prices up in Singapore ($10/mt) and Fujairah ($4/mt), and down in Zhoushan ($5/mt)
• B30-VLSFO price down in Singapore ($31/mt)

VLSFO prices across the three major Asian bunker ports have risen by $12-36/mt over the weekend.

In Zhoushan, the VLSFO price increased by $13/mt, while the HSFO price fell by $5/mt, widening the port’s Hi5 spread from $179/mt to $197/mt. However, the spread remains below Singapore’s $238/mt and Fujairah’s $229/mt.

VLSFO availability in Zhoushan remains under pressure, despite muted bunker demand. Suppliers are now recommending lead times of around 11 days, almost unchanged from last week. Lead times for both LSMGO and HSFO have also increased to about 11 days, from around 10 days previously.

The tighter availability is primarily due to the prolonged suspension of bunkering operations in Zhoushan following Typhoon Dolphin. Bunkering at the port’s outer and inner anchorages has been suspended since Thursday because of adverse weather conditions brought by the typhoon, according to a source.

Typhoon Dolphin weakened after making two landfalls along the coast of Zhejiang province on Sunday, prompting China’s National Meteorological Centre (NMC) to issue its least severe typhoon alert on Monday morning.

However, suppliers remain uncertain about when bunkering operations in Zhoushan will fully resume, the source added.

In Taiwan, VLSFO and LSMGO can be supplied within around two days at Hualien and Keelung, while deliveries at Kaohsiung and Taichung require around three days.

Availability in Keelung has also been affected by vessel maintenance issues. One bunker barge suffered a major technical failure, while another was undergoing dry dock maintenance. A bunker barge from Taichung has since been temporarily deployed to support operations and reduce waiting times. The damaged barge is expected to return to service later this week, according to a Taiwan-based trader.

Brent

The front-month ICE Brent contract has gained by $1.53/bbl on the day from Friday, to trade at $84.56/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has opened the week higher, after market expectations of a swift reopening of the Strait of Hormuz took a backseat.

Tehran has demanded six major changes in Washington's foreign policy as a prerequisite to allow commercial vessels to safely transit the critical oil chokepoint, that carried one-fifth of global seaborne oil flows prior to the conflict.

“Oil prices remain supported by uncertainty surrounding the Strait of Hormuz,” two analysts from ING Bank noted.

The demands include a total cessation of all US military action in the region and the immediate withdrawal of all US naval and air forces from around Iran, among others.

“While US President Donald Trump said Washington is "semi-negotiating" with Iran… significant hurdles remain before any broader agreement is reached,” ING Bank’s analysts added.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by three over the week to 454 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Tuhin Roy and Aparupa Mazumder

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