East of Suez Market Update 18 Sep
Regional bunker benchmarks have moved in mixed directions, with Zhoushan's grades broadly higher and Singapore's mostly lower.
IMAGE: Aerial view Zhoushan City, Zhejiang Province. Getty Images
Changes on the day to 17.00 SGT (09.00 GMT) today:
- VLSFO prices up in Zhoushan ($13/mt), Fujairah ($8/mt), and unchanged in Singapore
- LSMGO prices up in Zhoushan ($18/mt), and down in Singapore ($21/mt) and Fujairah ($1/mt)
- HSFO prices up in Zhoushan ($4/mt), and down in Singapore ($15/mt) and Fujairah ($5/mt)
- B30-VLSFO prices down in Singapore ($12/mt)
Zhoushan's VLSFO price has risen by $13/mt, the steepest increase among the three major Asian bunker ports. It now stands at a $53/mt premium over Singapore and a $65/mt discount to Fujairah.
Zhoushan suppliers are quoting lead times of around 10 days for VLSFO, LSMGO and HSFO, with availability still tight even though demand has eased.
The VLSFO lead time is little changed on the week, with ongoing weather disruption continuing to constrain supply. Bunkering has now resumed at the port's Tiaozhoumen and Xiazhimen outer anchorages, a source said, after a 22-day halt linked to a typhoon system. All anchorages in Zhoushan are once again fully operational.
In Taiwan, VLSFO and LSMGO lead times at Keelung, Taichung, Kaohsiung and Hualien hold at around two days, little changed from last week.
Brent
The front-month ICE Brent contract has declined by $1.57/bbl on the day, to trade at $102.71/bbl at 17.00 SGT (09.00 GMT) today.
Upward pressure:
Brent crude has felt some upward pressure amid escalating Middle East hostilities, with Saudi Arabia now directly involved in the conflict.
Vessel traffic through the Strait of Hormuz continues to remain well below the pre-war average of 140 daily transits, amid repeated attacks and the US Central Command’s (CENTCOM) ongoing blockade of the region.
As of Wednesday, 15 vessels attempted to transit the Strait of Hormuz – eight inbound and seven outbound – market intelligence provider Windward reported.
Out of this, nine vessels transited the region with their Automatic Identification System (AIS) turned off, Windward said.
Downward pressure:
Brent crude is poised to end the week lower after reports of ship-to-ship crude transfers eased some panic over Saudi export crisis.
Saudi Arabia is offering crude oil to Asian buyers via ship-to-ship transfer off Oman's Sohar port after drone attacks damaged its key East-West oil pipeline to the Red Sea, Reuters reported citing sources.
Moreover, Washington appears more optimistic than much of the market. Crude oil could be flowing out of the vital oil pipeline within days, Reuters reported, citing US energy secretary Chris Wright.
Riyadh is also trying to move oil through the Strait of Hormuz with US military assistance, Wright said on the sidelines of a G20 energy meeting.
By Tuhin Roy and Aparupa Mazumder
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