East of Suez Market Update 2 July

Most bunker prices across East of Suez ports have declined, while VLSFO availability has improved in Fujairah.

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

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

• VLSFO prices down in Fujairah ($46/mt), Singapore ($18/mt) and Zhoushan ($5/mt)
• LSMGO prices up in Singapore ($1/mt), and down in Fujairah ($30/mt) and Zhoushan ($16/mt)
• HSFO prices down in Zhoushan ($26/mt), Fujairah ($9/mt) and Singapore ($7/mt)
• B30-VLSFO price down in Singapore ($24/mt)

VLSFO prices across the three major Asian bunker ports have decreased by $5–46/mt, with Fujairah recording the steepest decline. Despite the decrease, Fujairah's VLSFO price remains at premiums of $118/mt over Singapore and $105/mt over Zhoushan.

Bunker fuel availability in Fujairah has improved across all major grades, with several suppliers now able to accommodate prompt VLSFO delivery requests.

Meanwhile, Zhoushan's VLSFO price has edged down by $5/mt, while its HSFO price has fallen more sharply by $26/mt, widening the port's Hi5 spread to $223/mt from $202/mt. Zhoushan's Hi5 spread remains higher than Singapore's $210/mt, but below Fujairah's $285/mt.

Despite subdued bunker demand, VLSFO availability in Zhoushan remains tight. Recommended lead times have extended to 7–12 days, up from 7–10 days last week. Lead times for both LSMGO and HSFO have also lengthened to 5–7 days, compared with three days previously.

Brent

The front-month ICE Brent contract has lost by $1.05/bbl on the day, to trade at $70.77/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the US Energy Information Administration (EIA) reported a draw in US crude stocks.

Commercial US crude oil inventories decreased by 3.8 million bbls to 408.4 million bbls in the week ending 26 June, according to data from the EIA.

The American Petroleum Institute (API) reported an even bigger decline of 6.1 million bbls during the same week.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

“Including releases from the Strategic Petroleum Reserve, total inventories in the US fell by 9,311kbbl [9.3 million bbls],” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude has plunged further amid positive outcomes from the ongoing indirect talks between the US and Iran, providing some positive market outlook to the ceasefire negotiations.

Qatar – one of the mediators of the ongoing talks – said ‘positive progress’ was made in yesterday’s discussions.

Qatari and Pakistani mediators held separate meetings with the US and Iranian negotiators in Doha, “with positive progress made on issues related to the Islamabad Memorandum of Understanding,” Qatar’s foreign ministry spokesperson Dr. Majed Al Ansari wrote on social media platform X.

The indirect talks are expected to continue Ansari said. The next meeting will be scheduled following the funeral of Iran’s former Supreme Leader Ali Khamenei.

The talks have “eased concerns that a return to conflict between the two sides would disrupt the movement of oil through the Strait of Hormuz,” Hynes added.

By Tuhin Roy and Aparupa Mazumder

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