East of Suez Market Update 14 Aug

Prices in East of Suez ports have moved in mixed directions, and bunkering operations have fully resumed in Zhoushan.

IMAGE: Cargo ships in Victoria Harbour of Hong Kong, China. Getty Images

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

• VLSFO prices up in Zhoushan ($13/mt), unchanged in Fujairah, and down in Singapore ($4/mt)
• LSMGO prices up in Fujairah ($24/mt) and Zhoushan ($16/mt), and down in Singapore ($2/mt)
• HSFO prices up in Fujairah ($8/mt) and Zhoushan ($5/mt), and down in Singapore ($2/mt)

Zhoushan’s VLSFO price has climbed over the past day, while prices in Fujairah and Singapore have remained broadly stable. This has pushed Zhoushan’s VLSFO from a discount to a slight premium over Fujairah, while its discount to Singapore has been completely erased.

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

The supply tightness is largely linked to the prolonged suspension of bunkering operations in Zhoushan, following Typhoon Dolphin.

Bunkering at Zhoushan’s Tiaozhoumen and Xiazhimen outer anchorages have resumed today, following an eight-day suspension caused by typhoon-related bad weather, according to a source. All anchorages in Zhoushan are now fully operational.

In Hong Kong, the bunker market remains largely unchanged, with suppliers continuing to recommend lead times of around seven days for all major fuel grades.

Brent

The front-month ICE Brent contract has gained by $0.46/bbl on the day, to trade at $87.83/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price is poised to end the week higher than it began, amid growing hostilities between the US and Iran, in the Middle East.

The US Central Command (CENTCOM) has established a “multinational attack drone task force,” it said.

The unit – called Task Force Falcon Strike – will deploy one-way attack drones on targets in the Middle East, consisting of unmanned systems operated by military support staff from the US and regional partners, CENTCOM said.

Downward pressure:

Brent’s price has felt some downward pressure after global oil watchdogs slashed oil demand projection for 2026.

The Organization of the Petroleum Exporting Countries (OPEC) has reduced its global oil demand growth projection for 2026, to about 600,000 b/d.

Meanwhile, Paris-based International Energy Agency (IEA) expects global oil demand to shrink by 1.6 million b/d in 2026.

“The IEA now expects global oil demand to fall by 1.6m b/d YoY in 2026 [1.6 million b/d year-on-year] due to Persian Gulf disruptions and elevated fuel prices,” two analysts from ING Bank noted.

By Tuhin Roy and Aparupa Mazumder

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