East of Suez Market Update 17 Aug

Prices in East of Suez ports have moved in mixed directions, and availability of all grades is tight in Zhoushan.

IMAGE: Keelung city's skyline and port at dusk. Getty Images

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

• VLSFO prices up in Fujairah ($7/mt), and down in Singapore ($18/mt) and Zhoushan ($7/mt)
• LSMGO prices up in Singapore ($37/mt) and Fujairah ($33/mt), and down in Zhoushan ($4/mt)
• HSFO prices up in Zhoushan ($15/mt), Singapore ($8/mt) and Fujairah ($2/mt)
• B30-VLSFO price up in Singapore ($12/mt)

Singapore and Zhoushan’s VLSFO prices recorded declines over the weekend, while Fujairah’s price has increased. Zhoushan’s VLSFO is now at a premium of $9/mt over Singapore, but at a discount of $9/mt to Fujairah.

In Zhoushan, VLSFO prices fell by $7/mt, while HSFO prices increased by $15/mt, narrowing the port’s Hi5 spread from $179/mt, to $157/mt. However, the spread remains below Fujairah’s $200/mt and Singapore’s $176/mt.

VLSFO availability in Zhoushan remains constrained, despite muted bunker demand. Suppliers recommend lead times of around 7-10 days, compared with around 11 days last week. Lead times for LSMGO and HSFO have also shortened to 7-10 days, from around 11 days previously.

The ongoing supply tightness is largely linked to the suspension of bunkering operations in Zhoushan over the past two weeks due to Typhoon Dolphin. Although operations fully resumed on Friday, the prolonged disruption has created significant backlogs, contributing to the current supply constraints.

In Taiwan, VLSFO and LSMGO can be supplied within around two days at Hualien, Kaohsiung and Keelung, while deliveries at Taichung require slightly longer lead times of 3-4 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 in October, according to a Taiwan-based trader.

Brent

The front-month ICE Brent contract has gained by $1.38/bbl on the day from Friday, to trade at $89.21/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price continues to trade close to the $90/bbl mark, as the conflict between Washington and Tehran deepens.

The 60-day peace accord signed on 17 June, setting a deadline for ending the war with Iran and reaching a permanent deal on Tehran’s nuclear program, is set to expire today.

Washington and Tehran are further apart than they were two months ago, according to market analysts.

Over the weekend, two separate commercial tankers, attempting to transit the Strait of Hormuz, came under drone attacks. Both vessels were subject to minor damages.

“Prices remained supported by renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions and complicating prospects for a US-Iran deal,” two analysts from ING Bank noted.

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 one over the week to 455 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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