East of Suez Market Update 17 July

Most prices in East of Suez ports have risen, and availability is good across several Sri Lankan ports.

IMAGE: Container ship at Colombo port, Sri Lanka. Getty Images

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

• VLSFO prices up in Zhoushan ($19/mt), Fujairah ($4/mt), and down in Singapore ($6/mt)
• LSMGO prices up in Zhoushan ($57/mt), Fujairah ($17/mt) and Singapore ($10/mt)
• HSFO prices up in Singapore ($22/mt), Fujairah ($17/mt) and Zhoushan ($5/mt)

Zhoushan’s VLSFO price has risen by $19/mt in the past day, outpacing Fujairah’s increase, while Singapore’s price has declined. Zhoushan’s VLSFO is now priced at a marginal $4/mt premium to Singapore, but remains at a substantial $46/mt discount to Fujairah.

Bunker availability in Zhoushan has improved as demand has weakened. 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.

Bunker deliveries resumed on Wednesday at Zhoushan’s more sheltered Xiushandong and inner Mazhi anchorages after being suspended for eight days due to adverse weather caused by Super Typhoon Bavi, according to a source.

However, bunker operations remain suspended at the outer Tiaozhoumen and Xiazhimen anchorages.

Most suppliers are still uncertain about when bunkering operations across Zhoushan will fully resume, the source added.

In Sri Lanka, bunker market conditions remain stable, with sufficient stocks of all major bunker fuel grades available in Colombo and Hambantota. However, at least one supplier has increased its recommended lead time to around six days, up from about three days previously.

Brent

The front-month ICE Brent contract has gained by $0.87/bbl on the day, to trade at $85.11/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent’s price has jumped back above the $85/bbl mark following fresh threats from Iran to broaden the regional conflict to the Red Sea and the Bab al-Mandeb Strait.

Iran has instructed Yemen-based Houthi militants to prepare attacks on the Bab al-Mandeb Strait, if the US strikes Iran’s power infrastructure, Reuters reported.

Bab al-Mandeb is another vital oil chokepoint like the Strait of Hormuz, carrying about 7% of global seaborne oil flows.

Any new attacks in the region threatens to deepen the global energy crisis, as traffic through the Strait of Hormuz is already facing severe disruption.

“Oil prices continue to move higher, with neither the US nor Iran showing any real intent to dial down the latest surge in tensions,” two analysts from ING Bank noted.

Downward pressure:

Brent’s rally was partially capped after US President Donald Trump cancelled plans to impose a 20% fee of a cargo’s value for the US to assist in safely transiting the Strait of Hormuz.

Trump has pivoted from his earlier proposal, focusing instead on forging new trade deals with Gulf countries.

By Tuhin Roy and Aparupa Mazumder

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