East of Suez Market Update 11 June

Prices in East of Suez ports have moved in mixed directions, and LSMGO availability is good across several Omani ports.

IMAGE: An aerial view of Sohar Port and Freezone. Sohar Port and Freezone

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

• VLSFO prices up in Fujairah ($6/mt), Singapore ($5/mt) and Zhoushan ($2/mt)
• LSMGO prices up in Singapore ($16/mt), and down in Zhoushan ($13/mt) and Fujairah ($6/mt)
• HSFO prices up in Fujairah ($11/mt) and Singapore ($3/mt), and down in Zhoushan ($2/mt)
• B30-VLSFO price up in Singapore ($12/mt)

VLSFO prices across the three major Asian bunker hubs have edged higher over the past day. Singapore’s VLSFO price is now almost on par with Zhoushan’s, while remaining at a substantial discount of $455/mt to Fujairah.

Singapore’s LSMGO price has increased, in contrast to declines recorded in Zhoushan and Fujairah. As a result, Singapore’s LSMGO is priced at a premium of $22/mt to Zhoushan, but at a steep discount of $402/mt compared to Fujairah.

Bunker availability remains mixed in Singapore. VLSFO supply continues to be tight, with suppliers recommending lead times of 8–14 days, slightly improved from the 10–15 days advised last week. HSFO availability has also shown modest improvement, with lead times easing to 5–12 days, from 10–15 days previously. However, LSMGO supply has tightened, as recommended lead times have lengthened to 9–14 days, from around seven days last week.

Meanwhile, “overall, market conditions in Oman during May have remained largely consistent with the previous month, with no significant changes in demand, supply, or volumes. That said, we did observe a slight improvement in activity and overall business flow,” an Oman-based trader said.

LSMGO availability in Oman continues to be strong, with one supplier offering prompt deliveries and advising lead times of just 1–2 days at major ports including Duqm, Muscat, Sohar and Salalah.

Brent

The front-month ICE Brent contract has gained by $1.15/bbl on the day, to trade at $92.21/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has moved higher in the wake of fading ceasefire hopes between Washington and Tehran.

In the latest round of fire exchange, the US Central Command (CENTCOM) has targeted Iranian military surveillance, communication systems and air defense sites.

“Oil prices have continued to rally… amid additional US strikes in Iran,” two analysts from ING Bank said.

Iran’s navy has responded to the US strikes by declaring a complete closure of the Strait of Hormuz to all vessel traffic.

These strikes have effectively erased the oil market’s optimism established by April’s fragile ceasefire.

The latest development “once again suggests a deal is still some way off and that energy flows from the Persian Gulf will remain heavily constrained,” ING Bank’s analysts said.

Downward pressure:

While there are no significant downward pressures on Brent’s price today, market participants will be focused on any suggestions of progress in US-Iran negotiations.

Earlier this week, Israeli Prime Minister Benjamin Netanyahu said the Israel Defense Forces (IDF) will refrain from attacking Iranian sites “for now”.

By Tuhin Roy and Aparupa Mazumder

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