East of Suez Market Update 13 July

Prices in East of Suez ports have risen, and bunkering operations remain suspended in Zhoushan due to Super Typhoon Bavi.

IMAGE: Aerial view Zhoushan City, Zhejiang Province. Getty Images

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

• VLSFO prices up in Singapore ($22/mt), Fujairah ($15/mt) and Zhoushan ($11/mt)
• LSMGO prices up in Fujairah ($55/mt), Singapore ($20/mt) and Zhoushan ($8/mt)
• HSFO prices up in Zhoushan ($15/mt), Singapore ($14/mt) and Fujairah ($6/mt)
• B30-VLSFO price up in Singapore ($22/mt)

VLSFO prices across the three major Asian bunker hubs have risen by $11-22/mt over the weekend, with Zhoushan recording the smallest increase. Zhoushan's VLSFO price is currently $31/mt below Fujairah's and $9/mt below Singapore's.

Bunker availability in Zhoushan has improved amid weaker demand. Recommended lead times for VLSFO have shortened to around eight days, down from 10-15 days last week. Lead times for both LSMGO and HSFO have also eased to about five days, compared with 7-10 days previously.

Bunkering operations at Zhoushan's outer and inner anchorages have been suspended since last Tuesday as Super Typhoon Bavi continues to affect the region with adverse weather conditions, according to a source. Operations are expected to resume on 15 July, once weather conditions improve.

In Taiwan, bunkering has resumed at the ports of Keelung, Hualien, Taichung, Kaohsiung and Suao after temporary suspensions over the weekend, a Taiwan-based source said.

Recommended lead times for both VLSFO and LSMGO remain around two days in Hualien and Taichung, and about three days in Keelung and Kaohsiung, broadly unchanged from the previous week.

Brent

The front-month ICE Brent contract has gained by $1.70/bbl on the day from Friday, to trade at $77.90/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has climbed amid renewed hostilities in the Middle East – effectively shattering the temporary 60-day peace accord.

Another container vessel came under an Iranian missile attack off Oman’s coast yesterday, the United Kingdom Maritime Trade Operations (UKMTO) reported.

The US Central Command (CENTCOM) responded to the attack with strikes against 140 Iranian military targets, including missile and drone sites, naval capabilities, ammunition storage facilities and more.

The repeated attacks on commercial vessels have shattered the region’s fragile stability, with the recent escalation effectively throwing cold water on the now-defunct peace talks.

“There was no visible traffic in the strait on Sunday,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “The maritime security threat remains severe,” he added.

Downward pressure:

While Brent’s price faces no immediate downward pressure today, market participants remain wary of weakening global crude oil demand.

The Paris-based International Energy Agency (IEA) expects global oil demand to decline by 1 million b/d in 2026 – stopping short of providing an average global oil demand forecast.

The IEA expects oil demand to decline this year, as the ripple effects of the Middle East geopolitical unrest continue to impact various products and regions.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online